(215 ILCS 155/1)

(from Ch. 73, par. 1401)

Sec. 1.

This Act may be cited as the Title Insurance Act.

(Source: P.A. 86‑239.)

(215 ILCS 155/10)

(from Ch. 73, par. 1410)

Sec. 10.

All title insurance companies authorized to do business under this Act shall establish and maintain reserves against unpaid losses and loss expenses. Upon receiving notice from or on behalf of the insured of a title defect, lien or adverse claim against the title of the insured that may result in a loss or cause expense to be incurred in the proper disposition of the claim, the title insurance company shall determine the amount to be added to the reserve, which amount shall reflect a careful estimate of the loss or loss expense likely to result by reason of the claim. Reserves required under this Section may be revised from time to time and shall be redetermined at least once each year.

(Source: P.A. 86‑239.)

(215 ILCS 155/11)

(from Ch. 73, par. 1411)

Sec. 11.

Statutory premium reserve.

(a) A domestic title insurance company shall establish and maintain a statutory premium reserve computed in accordance with this Section. The reserve shall be reported as a liability of the title insurance company in its financial statements. The statutory premium reserve shall be maintained by the title insurance company for the protection of holders of title insurance policies. Except as provided in this Section, assets equal in value to the statutory premium reserve are not subject to distribution among creditors or stockholders of the title insurance company until all claims of policyholders or claims under reinsurance contracts have been paid in full, and all liability on the policies or reinsurance contracts has been paid in full and discharged or lawfully reinsured.

(b) A foreign or alien title insurance company authorized to do business under this Act shall maintain at least the same reserves on title insurance policies issued on properties located in this State as are required of domestic title insurance companies.

(c) The statutory premium reserve shall consist of:

(1) the amount of the statutory premium reserve on

January 1, 1990; and

(2) a sum equal to 12 1/2 cents for each $1,000 of

net retained liability under each title insurance policy on a single risk written on properties located in this State after January 1, 1990.

(d) Amounts placed in the statutory premium reserve in any year in accordance with this Section shall be deducted in determining the net profit of the title insurance company for that year.

(e) A title insurance company shall release from the statutory premium reserve a sum equal to 10% of the amount added to the reserve during a calendar year on July 1 of each of the 5 years following the year in which the sum was added, and shall release from the statutory premium reserve a sum equal to 3 1/3% of the amount added to the reserve during that year on each succeeding July 1 until the entire amount for that year has been released. The amount of the statutory premium reserve or similar premium reserve maintained before January 1, 1990, shall be released in accordance with the law in effect before January 1, 1990.

(Source: P.A. 86‑239; 87‑1151.)

(215 ILCS 155/12)

(from Ch. 73, par. 1412)

Sec. 12.

(a) The Director or his authorized representative shall have the power and authority, and it shall be his duty, to cause to be visited and examined annually any title insurance company doing business under this Act, and to compel a compliance with the provisions of law governing it as he may by law exercise in relation to trust companies.

(b) The Director or his authorized agent shall have power and authority to compel compliance with the provisions of this Act and shall, only upon the showing of good cause, require any title insurance company to obtain the appropriate records of its registered agents and make them available for audit at a time and place designated by the Director. Expenses incurred in the course of such audits will be the responsibility of the title insurance company.

(Source: P.A. 86‑239.)

(215 ILCS 155/13)

(from Ch. 73, par. 1413)

Sec. 13.

Each title insurance company shall file with the Department during the month of March of each year, a statement under oath, of the condition of such company on the thirty‑first day of December next preceding disclosing the assets, liabilities, earnings and expenses of the company. The report shall be in such form and shall contain such additional statements and information as to the affairs, business, and conditions of the company as the Director may from time to time prescribe or require.

(Source: P.A. 86‑239.)

(215 ILCS 155/14.1)

Sec. 14.1.

All moneys received by the Department of Financial Institutions under this Act shall be deposited in the Financial Institutions Fund created under Section 6z‑26 of the State Finance Act.

(Source: P.A. 88‑13.)

(215 ILCS 155/14)

(from Ch. 73, par. 1414)

Sec. 14.

(a) Every title insurance company and every independent escrowee subject to this Act shall pay the following fees:

(1) for filing the original application for a

certificate of authority and receiving the deposit required under this Act, $500;

(2) for the certificate of authority, $10;

(3) for every copy of a paper filed in the

Department under this Act, $1 per folio;

(4) for affixing the seal of the Department and

certifying a copy, $2;

(5) for filing the annual statement, $50.

(b) Each title insurance company shall pay, for all of its title insurance agents subject to this Act for filing an annual registration of its agents, an amount equal to $3 for each policy issued by all of its agents in the immediately preceding calendar year.

(Source: P.A. 93‑32, eff. 7‑1‑03.)

(215 ILCS 155/15.1)

Sec. 15.1.

No taxes to be imposed by political subdivisions.

The fees, charges, and taxes provided for by this Act shall be in lieu of all license fees or privilege or occupation taxes or other fees levied or assessed by any municipality, county, or other political subdivision of this State. No municipality, county, or other political subdivision of this State shall impose any license fee or privilege or occupation tax or fee upon any domestic, foreign, or alien company, or upon any of its agents, for the privilege of doing insurance business therein. This Section shall not be construed to prohibit the levy and collection of State, county, or municipal taxes upon the real and personal property of the company, including the tax imposed by subsections (c) and (d) of Section 201 of the Illinois Income Tax Act. This Section 15.1 is declared to be a denial and limitation of the powers of home rule units pursuant to paragraph (g) of Section 6 of Article VII of the Illinois Constitution of 1970.

(Source: P.A. 90‑317, eff. 8‑1‑97.)

(215 ILCS 155/15)

(from Ch. 73, par. 1415)

Sec. 15.

Whenever the existing or future laws of any State or country shall require of title insurance companies incorporated or organized under the laws of this State, as a condition precedent to their transacting in such other State or country the business of guaranteeing or insuring titles to real estate, compliance with laws, rules, regulations or prohibitions more onerous or burdensome than those imposed under this Act by this State on foreign title insurance companies transacting such business in this State, or shall require any deposit of securities or other obligations in such State or country for the protection of policyholders, or otherwise, in excess of the amounts required of foreign title insurance companies by this Act, or shall require of Illinois title insurance companies doing such business in such State or country, the payment of penalties, fees, charges or taxes greater than the aggregate for like purposes imposed by the laws of this State upon such foreign title insurance companies, then such laws, rules, regulations, and prohibitions of said other State or country shall apply to title insurance companies incorporated or organized under the laws of such State or country doing business in this State, and all such companies, doing business in this State, shall be required to make deposits with the Department, and to pay to the Department penalties, fees, charges, and taxes at least in amounts equal to those required in the aggregate for like purpose of Illinois companies doing such business in such State or country.

(Source: P.A. 86‑239.)

(215 ILCS 155/16)

(from Ch. 73, par. 1416)

Sec. 16.

Title insurance agents.

(a) No person, firm, partnership, association, corporation or other legal entity shall act as or hold itself out to be a title insurance agent unless duly registered by a title insurance company with the Director.

(b) Each application for registration shall be made on a form specified by the Director and prepared in duplicate by each title insurance company which the agent represents. The title insurance company shall retain the copy of the application and forward the original to the Director with the appropriate fee.

(c) Every applicant for registration, except a firm, partnership, association or corporation, must be 18 years or more of age.

(d) Registration shall be made annually by a filing with the Director; supplemental registrations for new title insurance agents to be added between annual filings shall be made from time to time in the manner provided by the Director; registrations shall remain in effect unless revoked or suspended by the Director or are voluntarily withdrawn by the registrant or the title insurance company.

(Source: P.A. 86‑239.)

(215 ILCS 155/17)

(from Ch. 73, par. 1417)

Sec. 17.

Independent escrowees.

(a) Every independent escrowee shall be subject to the same certification and deposit requirements to which title insurance companies are subject under Section 4 of this Act.

(b) No person, firm, corporation or other legal entity shall hold itself out to be an independent escrowee unless it has been issued a certificate of authority by the Director.

(c) Every applicant for a certificate of authority, except a firm, partnership, association or corporation, must be 18 years or more of age.

(d) Every certificate of authority shall remain in effect one year unless revoked or suspended by the Director or voluntarily surrendered by the holder.

(e) An independent escrowee may engage in the escrow, settlement, or closing business, or any combination of such business, and operate as an escrow, settlement, or closing agent, provided that:

(1) Funds deposited in connection with any escrow,

settlement, or closing shall be deposited in a separate fiduciary trust account or accounts in a bank or other financial institution insured by an agency of the federal government unless the instructions provide otherwise. Such funds shall be the property of the person or persons entitled thereto under the provisions of the escrow, settlement, or closing and shall be segregated by escrow, settlement or closing in the records of the independent escrowee. Such funds shall not be subject to any debts of the escrowee and shall be used only in accordance with the terms of the individual escrow, settlement or closing under which the funds were accepted.

(2) Interest received on funds deposited with the

independent escrowee in connection with any escrow, settlement or closing shall be paid to the depositing party unless the instructions provide otherwise.

(3) The independent escrowee shall maintain separate

records of all receipt and disbursement of escrow, settlement or closing funds.

(4) The independent escrowee shall comply with any

rules or regulations promulgated by the Director pertaining to escrow, settlement or closing transactions.

(f) The Director or his authorized representative shall have the power and authority to visit and examine at any time any independent escrowee certified under this Act and to compel compliance with the provisions of this Act.

(g) A title insurance company or title insurance agent, not qualified as an independent escrowee, may act in the capacity of an escrow agent when it is supplying an abstract of title, grantor‑grantee search, tract search, lien search, tax assessment search, or other limited purpose search to the parties to the transaction even if it is not issuing a title insurance commitment or title insurance policy. A title insurance agent may act as an escrow agent only when specifically authorized in writing on forms prescribed by the Director by a title insurance company that has duly registered the agent with the Director and only when notice of the authorization is provided to and receipt thereof is acknowledged by the Director. The authority granted to a title insurance agent may be limited or revoked at any time by the title insurance company.

(Source: P.A. 91‑159, eff. 1‑1‑00.)

(215 ILCS 155/18)

(from Ch. 73, par. 1418)

Sec. 18.

(a) Application of this Section is limited to 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.

(b) No title insurance company, independent escrowee, or title insurance agent may issue a title insurance policy to, or provide services to an applicant if it knows or has reason to believe that the applicant was referred to it by any producer of title business or by any associate of such producer, where the producer, the associate, or both, have a financial interest in the title insurance company, independent escrowee, or title insurance agent to which business is referred unless the producer has disclosed to any party paying for the products or services, or his representative, the financial interest of the producer of title business or associate referring the title business and a disclosure of an estimate of those charges to be paid as described in Section 19. Such disclosure must be made in writing on forms prescribed by the Director prior to the time that the commitment for title insurance is issued. The title insurance company, independent escrowee, or title insurance agent shall maintain the disclosure forms for a period of 3 years.

(c) Each title insurance company, independent escrowee, and title insurance agent shall file with the Director, on forms prescribed by the Director, reports 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.

(1) Each title insurance company and independent

escrowee shall file the report required under this subsection with its application for a certificate of authority and at any time there is a change in the information provided in the last report.

(2) Each title insurance agent shall file the report

required under this subsection 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 its last report.

(3) Each title insurance company, independent

escrowee, or title insurance agent doing business on the effective date of this Act shall file the report required under this subsection within 90 days after such effective date.

(Source: P.A. 86‑239.)

(215 ILCS 155/19)

(from Ch. 73, par. 1419)

Sec. 19.

Nothing contained in this Act shall be construed as giving any authority to the Director to set or otherwise adjust the fees charged to the parties to the transaction for:

(1) issuing a title insurance policy, including any

service charge or administration fee for the issuance of a title insurance policy;

(2) abstracting, searching and examining title;

(3) preparing or issuing preliminary reports,

property profiles, commitments, binders, or like product;

(4) closing fees, escrow fees, settlement fees, and

like charges.

(Source: P.A. 86‑239.)

(215 ILCS 155/2)

(from Ch. 73, par. 1402)

Sec. 2.

Any corporation which has been or shall be incorporated or qualified to do business under the Business Corporation Act of 1983, as now or hereafter amended, or any predecessor law for the purpose, in whole or part, of guaranteeing or insuring titles to real estate, may transact such business during the time for which it may be incorporated or qualified to do business in this State, subject to the requirements of this Act.

(Source: P.A. 86‑239.)

(215 ILCS 155/20)

(from Ch. 73, par. 1420)

Sec. 20.

The Director shall rely upon federal regulations and opinion letters and may adopt rules and regulations as needed to implement and interpret the provisions of this Act.

(Source: P.A. 86‑239.)

(215 ILCS 155/21)

(from Ch. 73, par. 1421)

Sec. 21.

Regulatory action.

(a) The Director may refuse to grant, and may suspend or revoke, any certificate of authority, registration or license issued pursuant to this Act if he determines that the holder of or applicant for such certificate, registration or license:

(1) has intentionally made a material misstatement

or fraudulent misrepresentation in relation to a matter covered by this Act;

(2) has misappropriated or tortiously converted to

its own use, or illegally withheld, monies held in a fiduciary capacity;

(3) has demonstrated untrustworthiness or

incompetency in transacting the business of guaranteeing titles to real estate in such a manner as to endanger the public;

(4) has materially misrepresented the terms or

conditions of contracts or agreements to which it is a party;

(5) has paid any commissions, discounts or any part

of its premiums, fees or other charges to any person in violation of any State or federal law or regulations or opinion letters issued under the federal Real Estate Settlement Procedures Act of 1974; or

(6) has failed to comply with the deposit and

reserve requirements of this Act or any other requirements of this Act.

(b) In every case where a registration or certificate is suspended or revoked, or an application for a registration or certificate or renewal thereof is refused, the Director shall serve notice of his action, including a statement of the reasons for his action, either personally or by registered or certified mail. Service by mail shall be deemed completed if such notice is deposited in the post office, postage paid, addressed to the last known address specified in the application for the certificate or registration of such holder or registrant.

(c) In the case of a refusal to issue or renew a certificate or accept a registration, the applicant or registrant may request in writing, within 30 days after the date of service, a hearing. In the case of a refusal to renew, the expiring registration or certificate shall be deemed to continue in force until 30 days after the service of the notice of refusal to renew, or if a hearing is requested during that period, until a final order is entered pursuant to such hearing.

(d) The suspension or revocation of a registration or certificate shall take effect upon service of notice thereof. The holder of any such suspended registration or certificate may request in writing, within 30 days of such service, a hearing.

(e) In cases of suspension or revocation of registration pursuant to subsection (a), the Director may, in the public interest, issue an order of suspension or revocation which shall take effect upon service of notification thereof. Such order shall become final 60 days from the date of service unless the registrant requests in writing, within such 60 days, a formal hearing thereon. In the event a hearing is requested, the order shall remain temporary until a final order is entered pursuant to such hearing.

(f) Hearing shall be held at such time and place as may be designated by the Director either in the City of Springfield, the City of Chicago, or in the county in which the principal business office of the affected registrant or certificate holder is located.

(g) The suspension or revocation of a registration or certificate or the refusal to issue or renew a registration or certificate shall not in any way limit or terminate the responsibilities of any registrant or certificate holder arising under any policy or contract of title insurance to which it is a party. No new contract or policy of title insurance may be issued, nor may any existing policy or contract to title insurance be renewed by any registrant or certificate holder during any period of suspension or revocation of a registration or certificate.

(h) The Director may issue a cease and desist order to a title insurance company, agent, or other entity doing business without the required license or registration, when in the opinion of the Director, the company, agent, or other entity is violating or is about to violate any provision of this Act or any law or of any rule or condition imposed in writing by the Department.

The Director may issue the cease and desist order without notice and before a hearing.

The Director shall have the authority to prescribe rules for the administration of this Section.

If it is determined that the Director had the authority to issue the cease and desist order, he may issue such orders as may be reasonably necessary to correct, eliminate or remedy such conduct.

Any person or company subject to an order pursuant to this Section is entitled to judicial review of the order in accordance with the provisions of the Administrative Review Law.

The powers vested in the Director by this Section are additional to any and all other powers and remedies vested in the Director by law, and nothing in this Section shall be construed as requiring that the Director shall employ the powers conferred in this Section instead of or as a condition precedent to the exercise of any other power or remedy vested in the Director.

(Source: P.A. 89‑601, eff. 8‑2‑96.)

(215 ILCS 155/22)

(from Ch. 73, par. 1422)

Sec. 22.

A corporation authorized to do business under this Act shall notify the Director of Revenue of the State of Illinois, by notice directed to his office in the City of Chicago, of each trust account or similar account established which relates to title exceptions due to a judgment lien or any other lien arising under any tax Act administered by the Illinois Department of Revenue, when notice of such lien has been filed with the registrar of titles or recorder, as the case may be, in the manner prescribed by law. Such notice shall contain the name, address, and tax identification number of the debtor, the permanent real estate index numbers, if any, and the address and legal description of the property, the type of lien claimed by the Department and identification of any trust fund or similar account held by such corporation or any agent thereof relating to such lien. Any trust fund or similar account established by such corporation or agent relating to any such lien shall include provisions requiring such corporation or agent to apply such fund in satisfaction or release of such lien upon written demand therefor by the Department of Revenue.

(Source: P.A. 86‑239.)

(215 ILCS 155/23)

(from Ch. 73, par. 1423)

Sec. 23.

Any violation of any of the provisions of this Act shall constitute a business offense and shall subject the party violating the same to a penalty of $1000 for each offense.

(Source: P.A. 86‑239.)

(215 ILCS 155/24.5)

Sec. 24.5.

Non‑English language transactions.

A title insurance company, title insurance agent, or independent escrowee may conduct transactions in a language other than English through an employee or agent acting as interpreter or through an interpreter provided by the customer.

(Source: P.A. 92‑578, eff. 6‑26‑02.)

(215 ILCS 155/24)

(from Ch. 73, par. 1424)

Sec. 24.

Except as permitted by this Act or by federal law, regulations or opinion letters, no person shall pay or accept, directly or indirectly, any commission, discount, referral fee or other consideration as inducement or compensation for the referral of title business or for the referral of any escrow or other service from a title insurance company, independent escrowee or title insurance agent.

Any violation of this Section 24 is a Class A misdemeanor.

(Source: P.A. 86‑239.)

(215 ILCS 155/25)

(from Ch. 73, par. 1425)

Sec. 25.

(a) Any person or persons who violate the prohibitions or limitations of subsection (a) of Section 21 of this Act shall be liable to the person or persons charged for the settlement service involved in the violation for actual damages.

(b) Any title insurance company or a title insurance agent who violates the prohibitions or limitations of subsection (a) of Section 21 of this Act shall be subject to injunctive relief. If a permanent injunction is granted, the court may award actual damages. Reasonable attorney's fees and costs may be awarded to the prevailing party.

(Source: P.A. 86‑239.)

(215 ILCS 155/3.1)

Sec. 3.1.

Public policy.

It is declared to be the public policy of this State, pursuant to subsection (h) of Section 6 of Article VII of the Illinois Constitution of 1970, that any power or function set forth in this Act to be exercised by the State is an exclusive State power or function. Such power or function shall not be exercised concurrently, either directly or indirectly, by any unit of local government, including home rule units, except as otherwise provided in this Act. The fees, charges, and taxes provided for by this Act shall, as provided in Section 15.1 of this Act, be in lieu of all license fees or privilege or occupation taxes or other fees levied or assessed by any home rule unit.

(Source: P.A. 90‑317, eff. 8‑1‑97.)

(215 ILCS 155/3)

(from Ch. 73, par. 1403)

Sec. 3.

As used in this Act, the words and phrases following shall have the following meanings unless the context requires otherwise:

(1) "Title insurance business" or "business of title insurance" means:

(A) Issuing as insurer or offering to issue as

insurer title insurance; and

(B) Transacting or proposing to transact one or more

of the following activities when conducted or performed in contemplation of or in conjunction with the issuance of title insurance;

(i) soliciting or negotiating the issuance of

title insurance;

(ii) guaranteeing, warranting, or otherwise

insuring the correctness of title searches for all instruments affecting titles to real property, any interest in real property, cooperative units and proprietary leases, and for all liens or charges affecting the same;

(iii) handling of escrows, settlements, or

closings;

(iv) executing title insurance policies;

(v) effecting contracts of reinsurance;

(vi) abstracting, searching, or examining

titles; or

(vii) issuing closing protection letters;

(C) Guaranteeing, warranting, or insuring searches

or examinations of title to real property or any interest in real property, with the exception of preparing an attorney's opinion of title; or

(D) Guaranteeing or warranting the status of title

as to ownership of or liens on real property and personal property by any person other than the principals to the transaction; or

(E) Doing or proposing to do any business

substantially equivalent to any of the activities listed in this subsection, provided that the preparation of an attorney's opinion of title pursuant to paragraph (1)(C) is not intended to be within the definition of "title insurance business" or "business of title insurance".

(1.5) "Title insurance" means insuring, guaranteeing, warranting, or indemnifying owners of real or personal property or the holders of liens or encumbrances thereon or others interested therein against loss or damage suffered by reason of liens, encumbrances upon, defects in, or the unmarketability of the title to the property; the invalidity or unenforceability of any liens or encumbrances thereon; or doing any business in substance equivalent to any of the foregoing. "Warranting" for purpose of this provision shall not include any warranty contained in instruments of encumbrance or conveyance. An attorney's opinion of title pursuant to paragraph (1)(C) is not intended to be within the definition of "title insurance".

(2) "Title insurance company" means any domestic company organized under the laws of this State for the purpose of conducting the business of guaranteeing or insuring titles to real estate and any title insurance company organized under the laws of another State, the District of Columbia or foreign government and authorized to transact the business of guaranteeing or insuring titles to real estate in this State.

(3) "Title insurance agent" means a person, firm, partnership, association, corporation or other legal entity registered by a title insurance company and authorized by such company to determine insurability of title in accordance with generally acceptable underwriting rules and standards in reliance on either the public records or a search package prepared from a title plant, or both, and authorized in addition to do any of the following: act as an escrow agent, solicit title insurance, collect premiums, issue title reports, binders or commitments to insure and policies in its behalf, provided, however, the term "title insurance agent" shall not include officers and salaried employees of any title insurance company.

(4) "Producer of title business" is 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 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.

(5) "Associate" is any firm, association, partnership, corporation or other legal entity organized for profit in which a producer of title business is a director, officer, or partner thereof, or owner of a financial interest, as defined herein, in such entity; any legal entity that controls, is controlled by, or is under common control with a producer of title business; and any natural person or legal entity with whom a producer of title business has any agreement, arrangement, or understanding or pursues any course of conduct the purpose of which is to evade the provisions of this Act.

(6) "Financial interest" is any ownership interest, legal or beneficial, except ownership of publicly traded stock.

(7) "Refer" means to place or cause to be placed, or to exercise any power or influence over the placing of title business, whether or not the consent or approval of any other person is sought or obtained with respect to the referral.

(8) "Escrow Agent" means any title insurance company or any title insurance agent acting on behalf of a title insurance company which receives deposits, in trust, of funds or documents, or both, for the purpose of effecting the sale, transfer, encumbrance or lease of real property to be held by such escrow agent until title to the real property that is the subject of the escrow is in a prescribed condition.

(9) "Independent Escrowee" means any firm, person, partnership, association, corporation or other legal entity, other than a title insurance company or a title insurance agent, which receives deposits, in trust, of funds or documents, or both, for the purpose of effecting the sale, transfer, encumbrance or lease of real property to be held by such escrowee until title to the real property that is the subject of the escrow is in a prescribed condition. Federal and State chartered banks, savings and loan associations, credit unions, mortgage bankers, banks or trust companies authorized to do business under the Illinois Corporate Fiduciary Act, licensees under the Consumer Installment Loan Act, real estate brokers licensed pursuant to the Real Estate License Act of 2000, as such Acts are now or hereafter amended, and licensed attorneys when engaged in the attorney‑client relationship are exempt from the escrow provisions of this Act.

(10) "Single risk" means the insured amount of any title insurance policy, except that where 2 or more title insurance policies are issued simultaneously covering different estates in the same real property, "single risk" means the sum of the insured amounts of all such title insurance policies. Any title insurance policy insuring a mortgage interest, a claim payment under which reduces the insured amount of a fee or leasehold title insurance policy, shall be excluded in computing the amount of a single risk to the extent that the insured amount of the mortgage title insurance policy does not exceed the insured amount of the fee or leasehold title insurance policy.

(11) "Department" means the Department of Financial Institutions.

(12) "Director" means the Director of Financial Institutions.

(13) "Insured closing letter" or "closing protection letter" means an indemnification or undertaking to a party to a real estate transaction, from a principal such as a title insurance company or similar entity, setting forth in writing the extent of the principal's responsibility for intentional misconduct or errors in closing the real estate transaction on the part of a settlement agent, such as a title insurance agent or other settlement service provider.

(Source: P.A. 91‑159, eff. 1‑1‑00; 91‑245, eff. 12‑31‑99; 92‑16, eff. 6‑28‑01.)

(215 ILCS 155/4)

(from Ch. 73, par. 1404)

Sec. 4.

(a) Every title insurance company licensed or qualified to do business in this State shall, within 30 days after the effective date of this Act or within 30 days after incorporated or licensed to do business, whichever is later, deposit with the Department, for the benefit of the creditors of the company by reason of any policy issued by it, bonds of the United States, this State or any body politic of this State in amounts as specified in subsection (b). The bonds and securities so deposited may be exchanged for other such securities. No such bond or security shall be sold or transferred by the Director except on order of the circuit court or as provided in subsection (d). As long as the company depositing such securities remains solvent, the company shall be permitted to receive from the Director the interest on such deposit.

(b) Every title insurance company shall deposit bonds or securities in the sum of $50,000 plus $5,000 for each county, more than one, in which the real estate, upon which such policies are issued, is located, to maximum deposit of $500,000. Every title insurance company guaranteeing or insuring titles to real estate in counties having 500,000 or more inhabitants shall deposit securities with the Department in the sum of $500,000. Any title insurance company having deposited $500,000 in securities with the Department shall be entitled to guarantee or insure titles in any or all counties of the State.

(c) The Director may provide for custody of such securities by any trust company or bank located in this State and qualified to do business under the Corporate Fiduciary Act, as now or hereafter amended. The compensation, if any, of such custodian shall be paid by the depositing company. When the required deposit has been made by a title insurance company, the Director shall certify that it has complied with the provisions of this Section and is authorized to transact the business of insuring and guaranteeing titles to real estate.

(d) If a title insurance company shall at any time cause all of its unexpired policies to be paid, cancelled or reinsured and all of its liabilities under such policies thereby to be extinguished, or to be assumed by some surety or other responsible company authorized to do business in this State, the Director shall, on application of such company, verified by the oath of its president or secretary and on being satisfied by an examination of its books and its officers under oath that all of its policies are so paid, cancelled, extinguished or reinsured, deliver up to it such securities.

(Source: P.A. 86‑239.)

(215 ILCS 155/5)

(from Ch. 73, par. 1405)

Sec. 5.

It shall not be lawful for any company to engage or to continue in the business of guaranteeing or insuring titles to real estate, without first procuring from the Director a certificate of authority stating that such a company has complied with the requirements of Section 4 of this Act. If any company shall fail to maintain a deposit as required by this Act, the Director may revoke the certificate of authority granted on behalf of such company. The Director shall mail a copy of that revocation to the company and during the time of such revocation the company shall not conduct such business. A revocation shall not be set aside until a good and sufficient deposit shall have been made with the Department, fulfilling all the requirements of this Act.

(Source: P.A. 86‑239.)

(215 ILCS 155/6)

(from Ch. 73, par. 1406)

Sec. 6.

A title insurance company may obtain reinsurance for all or any part of its liability under one or more of its title insurance policies or reinsurance agreements and may also reinsure title insurance policies issued by other title insurance companies on risks located in this State or elsewhere.

(Source: P.A. 86‑239.)

(215 ILCS 155/7)

(from Ch. 73, par. 1407)

Sec. 7.

(a) Subject to the specific provisions of this Section, the Director may, after a notice and hearing, order a domestic title insurance company to limit or withdraw from certain investments, or discontinue certain investment practices, to the extent the Director finds that such investments or investment practices endanger the solvency of the company. The Director may consider the general investment provisions of the Illinois Insurance Code, as now or hereafter amended, in exercising the authority granted under this subsection (a).

(b) A domestic title insurance company may invest in title plants. For determination of the financial condition of such title insurance company, a title plant shall be treated as an asset valued at actual cost except that the combined value of all title plants owned shall be limited for asset valuation purposes to 50% of the surplus as regards policyholders as shown on the most recent annual statement of the title insurance company.

(c) Any investment of a domestic title insurance company acquired before the effective date of this Act and which, under this Section, would be considered ineligible as an investment on that date shall be disposed of within 2 years of the effective date of this Act. The Director, upon application and proof that forced sale of any such investment would be contrary to the best interests of the title insurer or its policyholders, may extend the period for disposal of the investment for a reasonable time.

(Source: P.A. 86‑239.)

(215 ILCS 155/8)

(from Ch. 73, par. 1408)

Sec. 8.

(a) The net retained liability of a title insurance company for a single risk on property located in this State, whether assumed directly or as reinsurance, may not exceed 50% of the total surplus to policyholders as shown in the most recent annual statement of the title insurance company on file with the Department.

(b) The Director may waive the limitation of this Section for a particular risk upon application of the title insurance company and for good cause shown.

(Source: P.A. 86‑239.)

(215 ILCS 155/9)

(from Ch. 73, par. 1409)

Sec. 9.

(a) Whenever the capital of any title insurance company authorized to do business under this Act shall be determined by the circuit court, upon the application of the Director, to have become impaired to the extent of 25% of the same, or to have otherwise become unsafe, it shall be the duty of the Director to cancel the authority of such company to do business.

(b) The Director shall give notice to such company to discontinue issuing new policies until such capital has been made good.

(c) Any officer who issues a new policy of title insurance on behalf of such company after such notice, and until such capital has been made good, shall, for each offense, forfeit a sum not exceeding $1,000.

(Source: P.A. 86‑239.)