Bulletin: CT2021001

Dear Associates:

In July 2020, Stewart Title Guaranty Company (“Stewart”) concluded its market conduct examination with the Connecticut Insurance Department. As a result of that examination, Stewart is issuing this communication as a reminder of certain requirements under Connecticut law.

I. RATES AND/OR FORMS:

As a reminder, all forms and/or all amounts charged for title insurance shall be the same as those rates and/or forms filed by Stewart with the Connecticut Insurance Department as required pursuant to the following Connecticut Statutes:

Connecticut General Statute Section 38a-419 provides, in part, the following:

"(c) No title insurer or title agent may use or collect any premium after October 1, 1990, except in accordance with the premium rate schedule filed with and approved by the commissioner as required by this section. The commissioner may provide by regulations, adopted in accordance with Chapter 54, for interim use of premium rate schedules in effect prior to October 1,1990."

Connecticut General Statute Section 38a-421 provides, in part, the following:

"(a) A title insurer shall file with the commissioner all forms it proposes to use in this state, including (1) title insurance policies, including standard form endorsements and (2) commitments, binders or any other reports issued prior to the issuance of a title insurance policy. If the commissioner finds in his review of a filing that it does not violate section 38a- 422, he shall approve the form within thirty days of filing. Prior to such approval, the commissioner may conduct public hearings with respect to the filing. Filings that the commissioner has failed to approve or disapprove within thirty days of filing shall be deemed approved. Upon notice to the insurer, the period for review of a form filing may be extended for an additional thirty days."

ANY AND ALL SOFTWARE CURRENTLY IN USE SHOULD BE REVIEWED AND MODIFIED APPROPRIATELY TO REFLECT THE MOST CURRENT RATES ON FILE WITH THE CONNECTICUT INSURANCE DEPARTMENT. IF YOU HAVE ANY QUESTIONS CONCERNING YOUR SOFTWARE UPDATES, PLEASE CONTACT YOUR AGENCY REPRESENTATIVE.

PLEASE CONTACT YOUR TITLE PRODUCTION SOFTWARE VENDOR TO GET THE MOST CURRENT RATE AND/OR FORM CHANGES IMPLEMENTED IN YOUR SYSTEM(S).

II. RECORD RETENTION:

This is a reminder of the following record retention requirements in Connecticut:

Connecticut General Statute Section 38a-407 provides, in part, the following:

"No title insurance policy may be written unless and until the title insurer or its title agent has caused to be conducted a reasonable search and examination of the title and has caused to be made a determination of insurability of title in accordance with sound underwriting practices. Evidence of the examination of title and determination of insurability shall be preserved and retained in the files of the title insurer or its title agent for a period of not less than ten years after the title insurance policy has been issued. Instead of retaining the original evidence, the title insurer or title agent may in the regular course of business establish a system whereby all or part of the evidence is recorded, copied, or reproduced by any process that accurately and legibly reproduces or forms a durable medium for reproducing the contents of the original. This section shall not apply to: (1) A title insurer assuming liability through a contract of reinsurance or (2) a title insurer acting as coinsurer if one of the other coinsuring title insurers has complied with this section. In causing to be conducted a reasonable search and examination of title and determination of insurability of title, a title insurer or its agent may rely upon a policy of title insurance previously issued by a title insurer authorized to do business in this state when such policy was issued."

III. CONNECTICUT UNFAIR INSURANCE PRACTICES ACT:

Connecticut Unfair Insurance Practices Act - Unfair Practices Section 38a-414 provides, in part, the following:

"(a) No title insurer or title agent shall (1) pay, directly or indirectly, to the insured, to any producer of title insurance business, to any associate of a producer or to any other person other than another title agent, any commission, any part of its premiums, fees or other charges or any other consideration or thing of value as inducement or compensation for the referral of title insurance business or (2) issue any title insurance policy in connection with any transaction in which it has paid or intends to pay any commission or any part of its premiums, fees or other charges, or any other consideration or thing of value which it knows to be in violation of this section."

"(b) No insured named In a title insurance policy, no producer of title insurance business, no associate of a producer, nor any other person, other than another title agent, may knowingly receive or accept, directly or indirectly, any commission, rebate, consideration, thing of value or inducement referred to in subsection (a) of this section."

Connecticut Unfair Insurance Practices Act - Unfair Practices Section 38a-415 provides the following:

"(a) Nothing in sections 383-400 to 38a-425, inclusive, shall be construed as prohibiting the division of premiums and charges between or among a title insurer and its title agent, two or more title insurers and their title agents, two or more title insurers, one or more title insurers and one or more title agents, or two or more title agents, provided such division of premiums and charges does not constitute (1) an unlawful rebate or inducement under the provisions of said sections or (2) payment of a forwarding fee or finder's fee."

"(b) Notwithstanding subsection (a) of this section, for any title insurance policy issued after October 1,1990, no title insurer shall pay to any title insurance agent or permit such agent to retain any amount exceeding sixty per cent of the gross premium for any policy of the title insurer issued by such agent. The maximum commission to a title insurance agent shall not be increased directly or indirectly by an insurer providing anything of value, including services, to an agent for less than the actual cost or fair market value."

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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