Underwriting Manual: TX
15.50
Pro-Forma Policies
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15.50.1
In General
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| Pro-forma policies are prohibited on 1-4 family residential mortgage title policies from being issued in the State of Texas. |
| It is not uncommon for a proposed insured to request from the Company, prior to the closing of the transaction, the issuance of a pro-forma policy for the purpose of examining the format and contents of the policy to be issued by the Company. Pro-forma policies are allowed in Texas as per Procedural Rule P-52. |
15.50.2
Procedural Rule P-52
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P-52. Delivery of Pro Forma Policies and Promulgated Forms1. For purposes of this rule, a "pro forma policy" is an Owner or Mortgagee Policy prepared prior to payment for, issuance and delivery of the policy, with completed Schedules A and B, showing the proposed insured, the amount of insurance, the exceptions that are proposed to be placed in the final policy to be issued, and the name of the title insurance company and title insurance agent.
2. A Company may not prepare and deliver to a proposed insured for review a proforma policy unless (a) the land is not residential real property and the proposed amount of insurance is $500,000 or more, and (b) each page of the completed Schedules A and B conspicuously states "This is a Pro Forma Policy furnished to or on behalf of the party proposed to be insured for discussion only. It does not reflect the present status of title and is not a commitment to insure the estate or interest as shown herein, nor does it evidence the willingness of the Company to provide any coverage shown herein. Any such commitment must be an express written undertaking issued on the appropriate forms of the Company."
3. A Company may provide a proposed insured with a copy of any promulgated title insurance form, or a foreign language translation of such form. Any translation must conform to the following conditions: (a) the translation must not be misleading, (b) an English copy of the promulgated form also must be furnished, and (c) the translation must include the following conspicuous provision at the top of the first page in both English and the language into which the form has been translated: "This translation of (name of promulgated form) is furnished to you in order to assist you in understanding its terms. This translation is not an official form promulgated by the Texas Department of Insurance. It is not a report or opinion of title, an agreement to insure, or a representation of the insurance you may receive. If this translation conflicts with the form promulgated by the Texas Department of Insurance, the promulgated form will control in all respects."
2. A Company may not prepare and deliver to a proposed insured for review a proforma policy unless (a) the land is not residential real property and the proposed amount of insurance is $500,000 or more, and (b) each page of the completed Schedules A and B conspicuously states "This is a Pro Forma Policy furnished to or on behalf of the party proposed to be insured for discussion only. It does not reflect the present status of title and is not a commitment to insure the estate or interest as shown herein, nor does it evidence the willingness of the Company to provide any coverage shown herein. Any such commitment must be an express written undertaking issued on the appropriate forms of the Company."
3. A Company may provide a proposed insured with a copy of any promulgated title insurance form, or a foreign language translation of such form. Any translation must conform to the following conditions: (a) the translation must not be misleading, (b) an English copy of the promulgated form also must be furnished, and (c) the translation must include the following conspicuous provision at the top of the first page in both English and the language into which the form has been translated: "This translation of (name of promulgated form) is furnished to you in order to assist you in understanding its terms. This translation is not an official form promulgated by the Texas Department of Insurance. It is not a report or opinion of title, an agreement to insure, or a representation of the insurance you may receive. If this translation conflicts with the form promulgated by the Texas Department of Insurance, the promulgated form will control in all respects."