Bulletin: NJ2018002

Dear Associates:

Changes have been made to the New Jersey Rate Manual effective April 1, 2018. Please take the opportunity to familiarize yourself with the updated Rate Manual, which the Department of Banking and Insurance has approved for use in New Jersey as of April 1, 2018. The revisions to the New Jersey Rate Manual are as follows:

1.9.1: “Simultaneously-Issued Policy” is a loan policy wherein the mortgage insured thereunder was made within sixty (60) days of the Date of Policy of an owner’s policy, in accordance with the provisions of §3.4 of this Manual. 

Explanation: The Rate Manual defines the length of time to which a simultaneously issued policy can be considered. The calculation and explanation are provided for in Section 3.4.

3.4  SIMULTANEOUSLY ISSUED POLICIES - BASIS FOR CALCULATION CHANGE

(a)  When a loan policy or policies are issued to a mortgagee or mortgagees simultaneously with the policy insuring the interest of the owner of the fee or leasehold, in the same estate, the Underwriting Rate shall be the rate applicable to the greatest Amount of Insurance (or aggregate Amounts of Insurance). The charge for each simultaneously-issued policy (after the policy for which the applicable Underwriting Rate is paid) shall be $25.00. For the purposes of this section, a loan policy or policies shall be deemed to have been issued simultaneously under the circumstances set forth below.

(b) If the mortgage or mortgages to be insured are made within sixty (60) days of the Date of Policy of the owner’s policy, and the Amount of Insurance or aggregate Amounts of Insurance of the loan policy or policies do not exceed the Amount of Insurance of the owner’s policy, the simultaneous-issue charge shall be $25.00 for each simultaneously-issued policy. But if the Amount of Insurance or aggregate Amounts of Insurance of the loan policy or policies shall exceed the Amount of Insurance of the owner’s policy, the charge shall be the Underwriting Rate for the liability assumed in excess of the Amount of Insurance of the owner’s policy, in addition to the simultaneous-issue charge of $25.00 for each simultaneously-issued policy. 

(c) In the event the mortgage or mortgages are made after the expiration of the sixty (60) day period referred to above, the simultaneous-issue charges shall not be applied; rather, the applicable Underwriting Rate shall be applied to the loan policy or policies. The rates and charges set forth above are imposed in addition to charges imposed under Article 5 or any other applicable article or section of this Manual. 

(d) In cases where the Insurer is requested to issue an Enhanced Coverage policy and a simultaneous standard coverage policy, the Enhanced Coverage policy shall be charged as specified in Section 4.8 of this Manual and the Standard, Refinance or Modification Underwriting Rate shall be charged for the standard coverage policy for any policy liability in excess of the face amount of the Enhanced Coverage policy, if any. In cases where a mortgage is being refinanced or modified, and the Insurer is requested to issue a simultaneous owner’s policy in the same or a lesser amount, the Standard Underwriting Rate shall be applied up to the face amount of the owner’s policy, which shall be at least the present fair market value of the property. The Refinance or Modification Underwriting Rate shall be applied to any sum in excess thereof, up to the face amount of the loan policy in the applicable bracket or brackets.

7.7 PRO FORMA

When an Insurer or Title Insurance Agent is asked to issue a pro forma policy or policies in connection with an insured transaction, and the Land to be insured thereunder is occupied by other than a one-to-four family residence, the charge for the issuance of the pro forma policy or policies shall be $250.00 for each policy, inclusive of any revisions thereto.

In addition, the following endorsement has been revised, with an effective date of April 1, 2018. The revisions to the endorsement are as follows:

23.1-06 - Co-Insurance - Multiple Policies Endorsement: 

1. Aggregation of Policy Liability

a. The Issuing Co-Insurer’s liability under the Co-Insurance Policy may be aggregated with other policy liabilities issued by the Issuing Co-Insurer with either an ALTA 12-06 or ALTA 12.1-06 Aggregation Endorsement.

b. Each Co-Insurer may aggregate its liability under the Co-Insurance Policy with other policy liabilities issued by that Co-Insurer, but only if this Co-Insurance Endorsement is issued with that Co-Insurer’s ALTA 12-06 or ALTA 12.1-06 Aggregation Endorsement.

c. Policy liability assumed by each of the Co-Insuring Companies may not be aggregated with other policy liabilities assumed by any other of the Co-Insuring Companies.

2. Each of the Co-Insuring Companies shall be liable to the Insured only for its Percentage of Liability of

a. the total loss or damage under the Co-Insurance Policy, but in no event greater than its respective Aggregate Amount of Insurance set forth in its ALTA 12-06 or ALTA 12.1-06 Aggregation Endorsement, if any; and

b. the costs, attorneys’ fees, and expenses provided for in the Conditions.

3. Any notice of claim and any other notice or statement in writing required to be given under the Co-Insurance Policy must be given to each of the Co-Insuring Companies at the addresses set forth above.

4. Any endorsement to the Co-Insurance Policy issued after the date of this Co-Insurance Endorsement must be signed by each of the Co-Insuring Companies by authorized officer or agent.

This Co-Insurance Endorsement is effective as of the Date of Policy of the Co-Insurance Policy. This Co-Insurance Endorsement may be executed in counterparts.

Updated endorsements will be made available on Stewart Virtual Underwriter.

Explanation: The previous endorsement 23.1-06 has been substantively revised from the prior version which was approved August 1, 2016. 

If you have any questions relating to this or other bulletins, please contact the Alabama State Office for assistance.

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