Virtual Underwriter

© 2020 Stewart Title Company

Underwriting Manual: TX

11.12

Letters To Customers

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State Supplements

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V 2
Underwriting Manual Subtopic
11.12.1

In General

V 2
The issuance of letters to customers written by employees or agents of the Company for the purpose of explaining, construing, interpreting or modifying matters contained in a title commitment or policy, either as exceptions or as subject of coverage, is not permitted unless specifically authorized by the Stewart Legal Services or a Texas Underwriter.These letters, also known as comfort letters, represent a definite extrahazardous risk for the Company. Generally, customers request these letters for any of the following purposes:
  • Explanation of the insurance afforded by the policy.
  • Explanation of the meaning and legal extension of a title exception.
  • The taxation effect of a transaction covered by the policy.
  • The effect on the coverage the policy of subsequent matters affecting either the insured, the title, or the land.
Letters to customers in connection with any of the above described purposes, in addition to being considered as an unauthorized practice of law, may be used in a court of law to prove the modification or extension, in favor of the insured-plaintiff, of the conditions of the policy coverage. Please also review Procedural Rule P-35 of the Texas Insurance Department regarding these letters.P-35.  Prohibition Against Guaranties, Affirmations, Indemnifications, and Certifications,      No Title Insurance Company, Title Insurance Agent, Direct Operation, Escrow Officer, nor any employee, officer, director or agent of any such entity or person, shall issue or deliver any form of verbal or written guaranty, affirmation, indemnification, or certification of any fact, insurance coverage or conclusion of law to any insured or party to a transaction other than: (i) a statement that a transaction has closed and/or has been funded, (ii) issuance of an insured closing service letter, or any insuring form or endorsement promulgated by the State Board of Insurance, or (iii) certification of copies of documents as being true and exact copies of the original document or of the document recorded in the public records.Any request for the issuance of a customer letter, either before or after the issuance of the policy must be referred to a Texas Underwriting Counsel or the South West States Regional Underwriting Counsel.