Bulletin: FL2015002

Dear Associates:

In response to the new TILA/RESPA Integrated Disclosure Rule (TRID) and CFPB regulations, which went into effect October 3, 2015, the Florida Administrative Code has adopted Rule 69B-186 008. It requires a settlement agent to certify that he or she has reviewed the Closing Disclosure and any other relevant forms and agrees to disburse the escrow funds in accordance with the terms of the transaction and Florida law. In order to comply with Rule 69B-186.008, the settlement agent must provide the parties to the transaction the “Florida Insurance Premium Disclosure & Settlement Agent Certification” form which has been promulgated by the Department of Financial Services. The purpose of this form is to explain the difference between the calculation and disclosure of title insurance premiums under TRID on the Closing Disclosure and the actual premium being charged pursuant to Florida law when both an owner’s policy and a simultaneously issued loan policy are being issued.

According to the TRID rule, the premium for the loan policy must be disclosed at the full promulgated rate on the closing disclosure without any discounts for simultaneous issue. This contradicts the Florida Title Insurance Promulgation Order which requires the full premium be charged for an owner’s policy and the simultaneous issue premium be charged for the loan policy.

Under TRID, the owner’s policy must be calculated by taking the full premium for the owner’s policy, adding the simultaneous issue rate, and then subtracting the full premium for the loan policy. The result would be an overstatement of the premium charge for the loan policy and an understatement of the premium charge for the owner’s policy under Florida’s promulgated rates. However, the total premium for both policies under TRID will be equal to the total premium under Florida’s rate. In cases where the seller is paying for the owner’s policy, it is permissible to include a “title insurance premium adjustment” on page 3 of the Closing Disclosure so that the buyer and seller are properly charged in accordance with the terms of the contract and in line with Florida law. An example of the calculation of simultaneous issue under TRID for a sale transaction as compared to Florida’s promulgated rates is attached as an exhibit. 

The Florida Insurance Premium Disclosure & Settlement Agent Certification form  must be signed by the parties to the transaction as it acts as an approval of the of the fees and costs as reflected on the Closing Disclosure or other settlement statement and authorizes the settlement agent to disburse funds accordingly. The form is attached as an exhibit, but can also be obtained from the Department of Financial Services, Division of Insurance Agent and Agency Services at http:/www.myfloridacfo.com/Division/Agents. 

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