Bulletin: IL2022001

Dear Associates:

Effective March 1, 2022, the Illinois Department of Financial and Professional Regulation, Division of Financial Services (“IDFPR”) issued a revised form Disclosure of Financial Interest (“DS-1” or “Form”). Amendments to the original Form provide clarification to consumers and ensure they are provided with accurate information concerning any financial interest a producer of title insurance may have in a title insurance business. All Illinois issuing offices should continue to use the existing DS-1 Form until the new Form is effective as of March 1, 2022. 

The Illinois Title Insurance Act (the “Act”) grants IDFPR regulatory authority over the title insurance industry and the jurisdiction to issue the promulgated DS-1 Form, which requires producers of title businesses to disclose any financial interest they hold in a title company, independent escrowee, or title insurance agency to sellers and purchasers of real property. The Act defines Producers of Title Insurance Businesses as “any person, firm, partnership, association, corporation or other legal entity engaged in this State in the trade, business, occupation or profession of (i) buying or selling interests in real property, (ii) making loans secured by interests in real property, or (iii) acting as broker, agent, attorney, or any representative of natural persons or other legal entities that buy or sell interests in real property or that lend money with such interests as security.” This definition includes title insurance agencies, settlement companies, attorney-agents, lenders, real estate brokers, and any representatives that assist in purchasing or selling real property or lending money with securitization against real property within the state of Illinois. For example, an attorney representing a purchaser or seller in a real estate transaction may wish to use a title insurance agency the attorney has a financial interest in. In this scenario, the attorney is required to disclose their financial interest in the title insurance agency to the party paying for the title insurance services.

All Illinois-issuing title companies, title agencies, and independent escrowees must comply with the Act. The following requirements apply to all businesses subject to the Act:

1. Submission of the DS-1 Form is limited to transactions involving residential properties of 4 or fewer units, at least one of which units is occupied or to be occupied by an owner, legal or beneficial. 
2. The disclosure must be made in writing on the prescribed DS-1 Form prior to issuance of a title commitment. The Disclosure shall be sent electronically, by U.S. mail, or personal delivery by the Producer/Associate to the seller(s) or buyer(s). In situations where the Owner’s Policy and Lender’s Policy are recommended by separate Producers/Associates, two disclosures are required. 
3. The requirements of the Disclosure include providing the party paying for the services with a complete estimate of charges for title insurance abstracting, searching, examination, title policy fees, and all escrow and closing fees associated with the transaction, prior to the issuance of a title insurance commitment. 
4. The title insurance company, independent escrowee, or title insurance agent must retain the completed disclosure forms for a period of 3 years. 
5. Each title insurance company, independent escrowee, and title insurance agent is responsible for filing reports with IDFPR setting forth the names and addresses of those persons, if any, who have had a financial interest in the title insurance company, independent escrowee, or title insurance agent during the calendar year, who are known or reasonably believed by the title insurance company, independent escrowee, or title insurance agent to be producers of title business or associates of producers. Each title insurance company and independent escrowee shall file the report with its application for a certificate of authority and at any time there is a change in the information provided in the previous report. 
6. Each title insurance agent shall file the report with its title insurance company for inclusion with its application for registration and at any time there is a change in the information provided in a previous report.

Please take the time to review the IDFPR DS-1 Form and accompanying instructions for further clarification. 

If you are in need of assistance or have questions regarding completion of the Form, please reach out to your manager, agency representative, Stewart's Legal Department, or a Stewart Title Guaranty Company underwriter.

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

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