Exhibit
Market Conduct Examinations
Patrick R. Thesing
Senior Vice President
Stewart Title Guaranty Company
I.Company and Agent Operations/Management
A. Up-to-date, valid internal, or external audit program
B. Appropriate controls, safeguards and procedures for protecting the integrity
of computer information
C. Antifraud Plan in place
D. Valid disaster recovery plan
E. Records are adequate, accessible, consistent and orderly and comply with
state record retention requirements
G. Organization is licensed for title insurance business
H. Acts within the scope of its license
I. No member of the Board of Directors may be a title insurance agent who wrote
more than 1% or more of the direct premiums for the previous calendar year.
J. Agencies and applicable employees must have errors and omission policies
and fidelity coverage if required by statutes, rules, and regulations.
K. Business is diversified as required by statutes, rules, and regulations
L. Cooperates on a timely basis with examiners performing the examinations
M. Periodic review and testing of title plant built, owned, controlled, or
maintained by a title agent.
II.Complaint Handling
A. All complaints are recorded in the required format on the complaint register
B. Adequate complaint handling procedures in place
C. Adequate steps are taken to address/resolve the complaint in accordance
with applicable statutes, rules and regulations, and contract language
D. Time frame for response is in accordance with applicable statutes, rules
and regulations
III.Escrow, Settlement, Closing, or Security Deposit Refund
A. All escrow funds are submitted for collection to or deposited in a separate
fiduciary trust account in a qualified financial institution promptly and
in accordance with statutes, rules and regulations
B. Interest received on funds shall be paid in accordance with applicable statutes,
rules and regulations
C. Disbursements are done in accordance with applicable statutes, rules and
regulations
IV.Marketing and Sales
A. All advertising and sales materials are in compliance with applicable statutes,
rules and regulations
B. Internal training materials are in compliance with applicable statutes,
rules and regulations
C. Communications to agents are in compliance with applicable statutes, rules
and regulations
D. Controlled business is handled in accordance with statutes, rules and regulations
E. Inducements are not provided, directly or indirectly, in consideration of
referral of business or escrow or other services provided by a title insurance
agent, if prohibited by statutes, rules and regulations
V.Title Insurance Agent Relations
A. Properly licensed and appointed in the jurisdiction where the application
was taken
B. Termination of agent complies with statutes regarding notification to the
agent and notification to the state if applicable
C. Written underwriting contracts, which include required provisions, are in
place between title insurance agencies and all applicable title companies,
and business is not placed without a contract
D. Records of terminated agents adequately document reasons for terminations
E. Policies and premiums are reported and remitted on a timely basis
F. Maintain a record of financial stability for each agent under contract
G. Conduct a review of underwriting, claims and escrow practices of the agent
in accordance with statutes, rules and regulations
H. Maintain an inventory of all policy forms or policy numbers allocated to
each agent
VI.Policyholder Service
A. All correspondence is answered in a timely and responsive manner
B. Disclosures are made as required
C. Underwriting and Rating
D. Rates charged are in accordance with rates, rules and manuals on file with
the department of insurance
E. Disclosures to insureds concerning rates and coverage are accurate and timely
V.Underwriting and Rating
A. Do not permit rebating, commission, cutting or inducements
B. Practices are not unfairly discriminatory; adheres to applicable statutes,
rules and regulations, and company guidelines in the selection of risks
C. Re-issue and refinance credits are applied consistently in compliance with
statutes, rules and regulations
D. All forms and endorsements forming a part o the contract are identified
and filed with the department of insurance (if applicable)
E. Agents are properly licensed and appointed in the jurisdiction where the
application was taken
F. Policies and endorsements are issued accurately, timely and completely
G. Do not engage in collusive or anti-competitive underwriting practices
H. Charges other than premium for providing coverage are in compliance with
statutes, rules and regulations
I. Other than closing or settlement protection, do not provide any other coverage
which purports to indemnify against improper acts or omissions of a person
with regard to escrow, settlement, or closing services
J. The closing or settlement protection conforms to the terms of coverage and
form of instrument as required by statutes, rules and regulations
K. Reports and disclosures are made in accordance with statutes, rules and
regulations
L. Comply with statutes, rules, and regulations regarding the recording, reporting,
and validation of revenue, loss and expense experience
M. All policies are correctly coded
VI.Claims
A. Initial contact by company with claimant is within the required time frame
B. Timely investigations are conducted
C. Resolve in a timely manner
D. Responses to correspondence are provided in a timely manner
E. Claim files are adequately documented
F. Claims are properly handled in accordance with policy provisions and applicable
statutes, rules and regulations
G. Claim files are reserved in accordance with company's established
procedures
H. Denied and closed-without-payment claims are handled in accordance with
policy provisions and state law
I. Canceled benefit checks and drafts reflect appropriate claim handling practices
J. Claim handling practices do not compel claimants to institute litigation
to recover amounts due under policies by offering substantially less than is
due under the policy
K. Indemnification of a proposed insured solely against the loss of settlement
funds may only be made for events as authorized by statutes, rules and regulations
L. Loss statistical coding is complete and accurate