Bulletin: LA2013003

Dear Associates:

The Louisiana Department of Insurance has approved a Form and Rate Rule filing made by LATISSO effective September 1, 2013, for the endorsements referenced below.

ALTA 28.1-06 (Encroachments - Boundaries and Easements) 04/02/12 (effective 09/01/13)

This is a new endorsement form and rate rule. This endorsement is similar to the ALTA 28 coverage and includes insurance against loss by reason of enforced removal of an improvement encroaching onto adjoining land or encroaching onto an easement. Section 4 of the endorsement allows the Company to designate encroachments listed as Exceptions on Schedule B for which it will not provide insurance under this endorsement.

Rate:    When issued with an Owner Policy, the rate is $250 per encroachment.
             When issued with a Loan Policy, the rate is $150 per encroachment.

ALTA 28.2-06 (Encroachments - Boundaries and Easements - Described Improvements) 04-02-13 (effective 09/01/13)

This is a new endorsement form and rate rule. This endorsement limits improvements to only those listed in Section 2 of the endorsement and may include improvements located on the Land or located on adjoining land at the Date of Policy. Coverage is provided against loss by reason of an encroachment of (1) any improvement on the Land onto adjoining land, (2) any improvement on the Land onto that portion of the Land subject to an easement, or (3) any improvement on adjoining land onto the Land at the Date of Policy. It also provides insurance by reason of enforced removal of any improvement on the Land due to such encroachments. Section 4 of the endorsement allows the Company to designate encroachments listed as Exceptions on Schedule B for which it will not provide insurance under this endorsement.

Rate:    When issued with an Owner Policy, the rate is $500 per encroachment.
             When issued with a Loan Policy, the rate is $300 per encroachment.

ALTA 30.1-06 (Commercial Participation Interest) 08-01-12 (effective 09/01/13)

This is a new endorsement form and rate rule. This endorsement is designed for issuance with a loan policy on a commercial transaction where the loan agreement includes a participation interest which is based on the equity in Title, increase in value of the title or cash flow as defined in the loan documents. It insures, as of Date of Policy, against loss or damage by reason of (a) the invalidity or unenforceability of the lien of the Insured Mortgage resulting from the provisions of the Insured Mortgage or Loan Documents containing a participation interest; (b) lack of priority of the lien of the Insured Mortgage at Date of Policy, securing (i) the unpaid principal balance of the loan and (ii) the interest on the loan, including the participation interest, if any, which lack of priority is caused by the provisions in the Loan Documents for payment or allocation to the Insured of any participation interest.

This endorsement contains exclusions from coverage:  usury; unconscionability; or any consumer credit protection or truth-in-lending law; disputes over the amount of the Participation Interest; the effects of mortgage recording or similar intangible taxes on the validity or enforceability of the Insured Mortgage; or mechanic’s liens.

Rate:    If issued as of Date of Policy is 10% of the original rate with a minimum premium of $250.
             If issued after Date of Policy is 15% of the original rate with a minimum premium of $250.

ALTA 31-06 Severable Improvements 02-03-11 (effective 09/01/13)

This is a new endorsement form and rate rule. This endorsement includes in the calculation of loss under the policy certain losses and costs related to “severable improvements” as set forth and defined therein. This endorsement shall only be issued when the Amount of Insurance in Schedule A of the Policy includes the aggregate of the value of Land or value of Leasehold Estate and value of Severable Improvements.

Rate:    $250

ALTA 34-06 (Identified Risk Coverage 08-01-11) (effective 09/01/13)

This is a new endorsement form and rate rule. This endorsement allows certain specific coverage for a matter referred to as the “identified risk” that is excepted to in Schedule B of the policy. The endorsement insures against loss or damage sustained by reason of (a) a final order enforcing the Identified Risk in favor of an adverse party or (b) the release of a prospective purchaser or lessee or lender from the obligation to purchase, lease or lend as a result of the Identified Risk, but only if there is a contractual condition requiring the delivery of marketable title and neither the Underwriter nor any other underwriter is willing to insure over the Identified Risk with the same conditions as in the endorsement.  This endorsement does not obligate the underwriter to establish the title free of the Identified Risk or to remove the Identified Risk.

Given that the risk associated with each Identified Risk may vary from negligible exposure (minimal) to substantial (maximum) exposure, the rate applicable to each Identified Risk must be reviewed and analyzed by the Underwriter.

Rate:    Minimum of $50 per Identified Risk to a maximum of 25% of full policy premium per
             Identified Risk.

Questions relating to this bulletin may be directed to Louisiana Underwriting Personnel at (800) 209-4675 or Stewart Legal Services.

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