THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.
Bulletin: NM000012
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Bulletin: NM000012
The Superintendent of Insurance adopted new rates, forms and rules effective July 1, 2006.
NEW RATES
The variable portion of the rates was reduced for an overall rate decrease of 5.0%. Flat fees (such as endorsements and simultaneous issue rates) were not changed, except as noted below.
The new rate schedule (for original Owner's Policies) is attached as Exhibit 1.
The range of underwriter/agent division of premium was not changed. NMAC 13.14.3.11 still states that the agent's split for amounts of insurance up to $2 million shall be 78-80%.
REBATES AND MARKETING - CHARGE FOR ALL SERVICE (NMAC 13.14.3.13), MARKETING ACTIVITIES (NMAC 13.14.3.15), AND NEW DEFINITIONS (13.14.1.7.1; 13.14.1.22)
These changes were adopted to clarify the existing rebate regulation and to provide consistency with the Real Estate Settlement Procedures Act (RESPA). These rules are attached as Exhibit 2.
The title insurer and title insurance agent (title company) must collect actual charges for services, time and equipment in the ordinary course of business, and may not provide additional services to persons who have failed to pay actual charges for prior services, such as farm packages. NMAC 13.14.3.13.
A new rule (NMAC 13.14.3.15) that is similar to RESPA applies to marketing activities. Among the prohibitions established by this rule:
-
A title company may not provide free products or services, such as postage, facsimile machines, computer hardware or software, telephones, office space, or copy machines to a producer (person, such as a broker, lender or attorney in a position to make a referral).
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A title company may not engage in joint advertising with a producer unless the producer pays its share in direct proportion to its prominence in the advertisement.
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A title company may not provide video or other cyber services, such as virtual tours, unless the producer pays at least the actual cost for the services. HUD has entered a number of Settlement Agreements with title companies, which typically provide that the title company will charge and collect a fee for any virtual tour. It will not provide the virtual tour for free. The fee shall be not less than the actual cost. The fees charged and collected must be uniform for all persons charged for virtual tours of a similar kind and quality, and virtual tour service shall be available, to the extent allowed by law, to anyone who wishes to use the service. The title company will not refuse to provide a virtual tour to any person because the person does not refer business to the title company.
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The title company may not sponsor a producer's open house, tour of open houses, awards banquet or party unless a representative of the title company is present and marketing materials and signage are on-site. The cost of the sponsorship may not exceed the advertising benefit.
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A title company may not provide free meals to a producer unless the title company is present, title insurance business is discussed, and the meals are not a regular occurrence. The title company may not provide free entertainment or free recreational activities. Lottery prizes to producers are invariably viewed as rebates by HUD.
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A title company may not enter leases for office space with a producer unless the lease is for commercially reasonable terms and at least fair market rental value, and the property is occupied by at least one bona fide full time employee of the lessee. HUD has entered a number of settlement agreements with title companies concerning conference room rentals that it considered to be illegal.
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A title company must charge a producer its actual pro rata cost for a career continuing education course.
ACCESS AND ENTRY ENDORSEMENT (NM 67)
The Access and Entry Endorsement (NM 67; ALTA 17)) insures that (1) the land abuts a named Street, (2) the land has actual vehicular and pedestrian access to that Street, (3) the Street is physically opened and publicly maintained, and (4) the insured may use existing curb cuts or entries along the abutting Street. NMAC 13.14.8.28. The Access and Entry Endorsement may be issued on a Loan or Owner's Policy covering land that is not one to four family residential property. The rate for the endorsement for each Street is $25. Our guidelines and the Endorsement are available through the references section at the end of this Bulletin.
CONTIGUITY ENDORSEMENT - CONTIGUITY OF SINGLE PARCEL (NM 54) AND CONTIGUITY OF MULTIPLE PARCELS (NM 66)
The Contiguity – Single Parcel Endorsement (NM 54; ALTA 19.1) replaces the prior Contiguity of Parcels Endorsement. The Contiguity - Multiple Parcels Endorsement (NM 66; ALTA 19) also is adopted. The Contiguity - Single Parcel Endorsement (NM 54) insures that the land described in the policy is contiguous to another tract of land that is not insured in the policy. The Contiguity - Multiple Parcels Endorsement (NM 66) insures that two or more tracts described in the policy are contiguous. These Endorsements may be issued on Loan or Owner's Policies that do not cover one to four family residential property. NMAC 13.14.8.20. The rate for either Endorsement is $100, regardless of the number of parcels referred to in the Endorsement. Our guidelines and the Endorsements are avaiable through the references section at the end of this Bulletin.
NON-IMPUTATION ENDORSEMENT (NM 28)
The Non-Imputation Endorsement Rule (NMAC 13.14.8.11) is amended to allow issuance of the Non-Imputation Endorsement (NM 28) on commercial transactions involving land owned by corporations, limited liability companies, limited partnerships and partial transfers of ownership interests. This Rule is attached as Exhibit 6. You should call our underwriting personnel if you are asked to issue this Endorsement. Our existing forms, guidelines and required Non-Imputation Affidavit are found in Virtual Underwriter at http://www.vuwriter.com/ .
NOTICE TO PROPOSED INSURED (NM 35)
This form was amended to modify the explanation of Standard Exception 3 (including a correct reference to the rate) and Standard Exception 8 (recognizing that this exception may be deleted from Owner's Policies). This form is available through the references section at the end of this Bulletin.
RATE FOR MANUFACTURED HOUSING ENDORSEMENT (NMAC 13.14.10.13)
The rate rule for Manufactured Housing Endorsements (NM 13.14.10.13) has been amended. The new rate for each Manufactured Housing Endorsement (NM 16) is changed to $75.
EXHIBIT 1
PREMIUM RATES FOR ORIGINAL OWNER'S POLICIES: The following schedule of premium rates for original owner's policies shall be in effect from July 1, 2006 until modified by the superintendent:
NEW MEXICO
SCHEDULE OF BASIC PREMIUM RATES
For Original Owners Policies of Title Insurance
Effective July 1, 2006
| Liability Charge Up to: | Total Charge: | Liability Charge Up to: | Total Charge: | Libility Charge Up to: | Total Charge: |
| 10,000 | 176 | 24,000 | 289 | 38,000 | 388 |
| 11,000 | 184 | 25,000 | 2906 | 39,000 | 394 |
| 12,000 | 193 | 26,000 | 304 | 40,000 | 401 |
| 13,000 | 201 | 27,000 | 311 | 41,000 | 407 |
| 14,000 | 210 | 28,000 | 319 | 42,000 | 414 |
| 15,000 | 218 | 29,000 | 327 | 43,000 | 421 |
| 16,000 | 227 | 30,000 | 334 | 44,000 | 427 |
| 17,000 | 235 | 31,000 | 342 | 45,000 | 434 |
| 18,000 | 244 | 32,000 | 348 | 46,000 | 440 |
| 19,000 | 251 | 33,000 | 355 | 47,000 | 447 |
| 20,000 | 259 | 34,000 | 361 | 48,000 | 454 |
| 21,000 | 266 | 35,000 | 368 | 49,000 | 460 |
| 22,000 | 274 | 36,000 | 375 | 50,000 | 467 |
| 23,000 | 281 | 37,000 | 381 |
|
Amounts of Insurance
(in thousands) |
Portion of rate
(per thousand) subject to agent commission, add: |
agent retention percentage
|
Additional rate per $1000 to be collected on policy amounts in excess of $10 million (solely for underwriter)
|
Total Charged to Consumer
|
|
over $50 to $100
|
$5.68
|
78-80%
|
|
$5.68
|
|
over $100 to $500
|
$4.47
|
78-80%
|
|
$4.47
|
|
over $500 to $2,000
|
$3.51
|
78-80%
|
|
$3.51
|
| over $2,000 to $5,000 | $2,82 | 75% | $2,82 | |
| over $5,000 to $10,000 | $2.34 | 70% | $2.34 | |
| over $10,000 to $25,000 | $2.01 | 65% | $0.25 | $2.26 |
| over $25,000 to $50,000 | $1.75 | 60% | $0.25 | $2.00 |
| over $50,000 | $1.40 | 50% | $0.25 | $1.65 |
EXHIBIT 2
MARKETING AND CHARGES FOR SERVICES
(Additions are capitalized. Deletions are stricken.)
13.14.3.13 CHARGE TO BE MADE FOR ALL SERVICES:
A. No person doing the business of title insurance shall furnish or offer to furnish services, information, appraisals, subdivision ownership lists, farm packages, estimates or income production potential, pre-search or listing packages, information kits or similar packages containing information about one or more parcels of real property without making AN ACTUAL charge for the same.
B. TITLE INSURERS AND TITLE INSURANCE AGENTS SHALL COLLECT ACTUAL CHARGES IN THE ORDINARY COURSE OF THEIR BUSINESS OPERATIONS. TITLE INSURERS AND TITLE INSURANCE AGENTS SHALL NOT PROVIDE ADDITIONAL OR NEW SERVICES TO INDIVIDUALS WHO HAVE FAILED TO PAY ACTUAL CHARGES FOR PRIOR SERVICES.
13.14.3.15 MARKETING ACTIVITIES. A TITLE INSURER OR TITLE INSURANCE AGENT CONDUCTING THE BUSINESS OF TITLE INSURANCE SHALL NOT:
A. MAKE ANY MONETARY PAYMENT TO ANY PRODUCER, UNLESS THE PAYMENT IS FOR THE ACTUAL COST OF BONA FIDE SUPPLIES OR SERVICES RECEIVED BY THE TITLE INSURER OR AGENT;
B. MAKE ANY IN KIND PAYMENT TO ANY PRODUCER OR PROVIDE ANY FREE PRODUCTS OR SERVICES, INCLUDING BUT NOT LIMITED TO POSTAGE, POSTAGE MACHINES, FACSIMILE MACHINES, COMPUTER HARDWARE OR SOFTWARE, COPY MACHINES, TELEPHONES, OR OFFICE SPACE TO ANY PRODUCER;
C. ENGAGE IN JOINT ADVERTISING BY ANY MEANS OF COMMUNICATION OR MEDIA THAT NAMES A SPECIFIC PRODUCER UNLESS THE PRODUCER PAYS ITS SHARE OF THE ADVERTISING COST IN DIRECT PROPORTION TO ITS PROMINENCE IN THE ADVERTISEMENT;
D. PROVIDE VIDEO EQUIPMENT OR ANY OTHER TYPE OF ELECTRONIC OR CYBER EQUIPMENT OR SERVICES, SUCH AS "VIRTUAL TOURS" UNLESS THE PRODUCER PAYS AT LEAST THE ACTUAL COST FOR THE EQUIPMENT OR SERVICES;
E. PROVIDE ADVERTISING BY ANY MEANS OF COMMUNICATION OR MEDIA FOR A PRODUCER UNLESS THE PRODUCER PAYS AT LEAST THE ACTUAL COST FOR THE ADVERTISEMENT TO THE TITLE INSURER OR AGENT;
F. SPONSOR, CO-SPONSOR, PROVIDE FREE DOOR PRIZES, REFRESHMENTS OR MEALS AT ANY PRODUCER'S OPEN HOUSE, TOUR OF OPEN HOUSES, AWARDS BANQUET, OR COMPANY PARTY UNLESS A REPRESENTATIVE OF THE TITLE INSURER OR AGENT IS PRESENT AND EDUCATIONAL OR MARKETING MATERIALS AND SIGNAGE ARE ON-SITE FOR THE FUNCTION; AT NO TIME SHALL THE COST OF ANY SPONSORSHIP EXCEED THE COMMENSURATE ADVERTISING BENEFIT OF THE EDUCATIONAL OR MARKETING MATERIALS AND SIGNAGE PROVIDED;
G. SPONSOR, CO-SPONSOR, PROVIDE FREE DOOR PRIZES, REFRESHMENTS OR MEALS AT ANY PRODUCER'S OPEN HOUSE UNLESS THE TITLE INSURER OR AGENT RECEIVES COMMENSURATE ADVERTISING BENEFIT;
H. PROVIDE FREE MEALS TO ANY PRODUCER UNLESS THE TITLE INSURER OR AGENT IS PRESENT, TITLE INSURANCE BUSINESS IS DISCUSSED AND THE MEALS ARE NOT A REGULAR OCCURRENCE; A TITLE INSURER OR AGENT SHALL NOT PROVIDE FREE RECREATIONAL ACTIVITIES OR ENTERTAINMENT TO ANY PRODUCER UNDER ANY CIRCUMSTANCE;
I. ENTER INTO ANY LEASE OR RENTAL AGREEMENT FOR OFFICE SPACE WITH A PRODUCER UNLESS:
(1) THE LEASE OR RENTAL AGREEMENT IS FOR COMMERCIALLY REASONABLE TERMS AND AT LEAST THE FAIR MARKET RENTAL RATE OF THE PROPERTY; AND
(2) THE PROPERTY IS PHYSICALLY OCCUPIED BY AT LEAST ONE BONA FIDE FULL TIME EMPLOYEE OF THE TITLE INSURER OR AGENT IF THE PRODUCER IS THE LESSOR OR BY ONE BONA FIDE FULL TIME EMPLOYEE OF THE PRODUCER IF THE TITLE INSURER OR AGENT IS THE LESSOR;
J. PROVIDE A CAREER CONTINUING EDUCATION COURSE FOR PRODUCERS, UNLESS EACH PRODUCER IN ATTENDANCE PAYS AT LEAST THE ACTUAL PER PERSON COST FOR THE COURSE TO THE TITLE INSURER OR AGENT; OR
K. ENGAGE IN ANY OTHER ACTIVITY OTHERWISE PROHIBITED BY SECTION 59A-16-17 NMSA 1978.
13.14.1.7 DEFINITIONS "A": As used in 13 NMAC Chapter 14, and also in interpreting the New Mexico Title Insurance Act, the following terms shall have the following meanings.***
B. ACTUAL CHARGE. A CHARGE APPROXIMATING THE COST OF THE ACTUAL TIME, EQUIPMENT, AND EXPENSES INCURRED.
13.14.1.22 DEFINITIONS "P": As used in 13 NMAC Chapter 14, and also in interpreting the New Mexico Title Insurance Act, the following terms shall have the following meanings.***
C. PRODUCER. A REAL ESTATE BROKER, QUALIFYING BROKER, REAL ESTATE SALES PERSON, LENDER, MORTGAGE BROKER, MORTGAGE COMPANY, BUILDER, DEVELOPER, ATTORNEY, ARCHITECT, OR ANY PERSON OR ENTITY IN A POSITION TO REFER BUSINESS TO A TITLE INSURER OR TITLE INSURANCE AGENT.
EXHIBIT 6
13.14.8.11 NON-IMPUTATION ENDORSEMENT:
The NM form 28, non-imputation endorsement, may be issued on an EXISTING OR CURRENTLY ISSUED owner's policy or loan policy insuring title to property held by a corporation, LIMITED LIABILITY COMPANY, or partnership AS AN INSURED EVEN when there has been no conveyance of title of such property, but there has been (1) a transfer/ ISSUANCE of all OR A PORTION of the stock of the INSURED corporation, (2) A TRANSFER/SUBSTITUTION OF ALL OR A PORTION OF THE INTERESTS OF THE INSURED PARTNERSHIP, or (3) A TRANSFER/SALE OF ALL OR A PORTION OF THE MEMBERSHIP INTERESTS OF THE INSURED LIMITED LIABILITY COMPANY.
This endorsement may be issued only upon the written authorization of the underwriter. The issuing agent shall retain such written authorization of the underwriter for a period of two years following the issuance of THE endorsement.
References
- Bulletins Replaced:
- None
- Related Bulletins:
- Underwriting Manual:
- None
- Exceptions Manual:
- None
- Forms:
- NM Form 28 Non-Imputation - Full Equity Transfer Endorsement (ALTA Form 15-06, Rev. 2006)
- NM Form 35 Notice to Purchaser Insured (Revised 07/2018)
- NM Form 54 Contiguity - Single Parcel Endorsement (ALTA Form 19.1-06, Rev. 2006)
- NM Form 66 Contiguity-Multiple Parcels Endorsement (ALTA 19-06, Rev. 2006)
- NM Form 67 Access and Entry Endorsement (ALTA 17-06, Rev. 2006)