H.B. 2966, as amended, would enact a new body of law to regulate and supervise title insurance agencies and agents. The bill would define "title insurance agent" as a person who, on behalf of a title insurance company, determines insurability and issues title insurance reports or policies; collects or disburses premiums, escrow or security deposits, or other funds; handles escrow, settlements, or closings; solicits or negotiates title insurance business; or records closing documents.
The bill would authorize a title insurance agent to operate as an escrow, settlement, or closing agent if:
all funds deposited with the agent are deposited in a separate fiduciary trust account in a qualified financial institution;
the funds remain the property of the person entitled to them under the provisions of the escrow, settlement, or closing agreement and are applied only in accordance with the terms of agreements under which the funds were accepted; and
the agent has the written consent of all parties to a transaction to retain the interest earned on moneys held in interest-bearing accounts.
Funds held in escrow would be disbursed only on the written authorization of buyer or seller, pursuant to a court order, or when a transaction is closed according to the agreement of the parties.
Additionally, the title insurance agent must have a certified audit of the escrow, settlement, and closing deposit accounts according to the schedule set out in the bill or an audit by the title insurance company. The frequency of the audit is dependent upon the population of the county. Sufficient records also must be maintained and kept as required by the Insurance Commissioner.
A title insurance agent not in compliance with the act would be subject to the penalties provided in the unfair trade practices act administered by the Commissioner.
House amendments generally were technical. A part of the amendment, however, would restrict title insurance agents to the same standards for retaining interest and disbursing funds as are applicable to real estate agents.
H.B. 2966 was requested by the Sedgwick County delegation in response to recent bankruptcy of a Wichita-based title insurance and escrow agency. The bill was supported by the Insurance Commissioner, the Kansas Land Title Association, and the Kansas Real Estate Association.
No fiscal note was available for the bill at the time of Committee consideration.
1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext-bill.html.