Bulletin: NY000209

The bulletin below references a Memorandum attachment which was sent to all recipients. If you would like to see the Memorandum, please send a written request to Stewart Title Insurance Company's Legal Department.

On July 22, 2003, Stewart Title Insurance Company joined in the execution of a Mutual Indemnification Agreement (hereinafter, the “Agreement”) with six otherNew York licensed title insurance underwriters. The purpose of the Agreement is to streamline the process of clearance of exceptions to title, allowing for a more expeditious process from application to closing. Attached to this Bulletin is a Memorandum, which is intended to describe how the Agreement is to be implemented.

Briefly, the aim of the Agreement is to create a process whereby certain exceptions to title, which predate the acquisition of the interest of an insured, may be omitted upon production of evidence of coverage afforded by a signatory to the Agreement. There are, however, several major points that bear reiteration.

First, not all exceptions may be disposed of by the terms of the Agreement. The attached Memorandum contains a list of “Covered Defects” (as that term is defined by the Agreement) as well as a list of matters that are not covered by the Agreement.

Second, not all underwriters have joined in the execution of the Agreement. As to those companies, the current process of exchanging indemnity letters will continue.

Third, the entire area of “mortgage only” letters is unaffected by the Agreement.

Only time will tell how effective the Agreement will be in simplifying the clearance and indemnification process. Undoubtedly there will be issues to be resolved at the outset.  Properly implemented and administered, it should eliminate a portion of the burdensome and time consuming process of clearance of title issues among participants.

If there are any questions regarding the application of the Agreement, please call Company Counsel.