23 CAR pt. 204 | 23 CAR Part 204 — Title Insurance

Chapter I

Subchapter C

Subpart 1

23 CAR § 204-101 Purpose {#sec-23-car-204-101 omnilex-key=us-ar-regs-official--title-23-part-204--23 CAR § 204-101}

23 CAR § 204-101. Purpose.

The purpose of this part is to:

(1) Implement Acts 2007, No. 684, the Arkansas Title Insurance Act, as amended by Acts 2009, No. 1190; and

(2) Set the standards and guidelines for applicants seeking title insurance agent and agency licenses in the State of Arkansas.

23 CAR § 204-102 Applicability and scope {#sec-23-car-204-102 omnilex-key=us-ar-regs-official--title-23-part-204--23 CAR § 204-102}

23 CAR § 204-102. Applicability and scope.

(a) This part shall apply to:

(1) All applicants seeking a title insurance agent or agency license under the Arkansas Title Insurance Act, Arkansas Code § 23-103-401 et seq.;

. (2) Title insurance agents or agencies previously licensed pursuant to the repealed Arkansas Title Insurance Agents' Licensing Act, Arkansas Code § 23-103-101 et seq. [repealed], who continue to meet all the residency and other requirements of the Arkansas Title Insurance Act and this part, effective January 1, 2008; and

(3) Title insurers, title insurance agents, and title insurance agencies.

(b) The following are exempt from this part:

(1) In accordance with Arkansas Code § 23-103-402(11)(B), an individual employed by a licensee under the Arkansas Title Insurance Act who does not sell or negotiate title insurance, but performs marketing duties under the supervision of a title agent;

(2) In accordance with Arkansas Code § 23-103-402(11)(B), an individual employed by a resident licensee under the Arkansas Title Insurance Act who is a closing agent and does not solicit, sell, or negotiate title insurance; and

(3) Those not required to have a license under the Arkansas Title Insurance Act.

History

Codification Notes: The Arkansas Title Insurance Agents’ Licensing Act, Arkansas Code § 23-103-101 et seq., was repealed by Acts 2007, No. 684, § 8. Authorities: Arkansas Code § 23-103-415; Arkansas Code § 23-61-108

23 CAR § 204-103 Definitions {#sec-23-car-204-103 omnilex-key=us-ar-regs-official--title-23-part-204--23 CAR § 204-103}

23 CAR § 204-103. Definitions.

As used in this part:

(1) “Commissioner” means the Insurance Commissioner of the State of Arkansas;

(2) “Department” means the State Insurance Department;

(3) “Rule” means the rules promulgated by the State Insurance Department unless the context requires otherwise;

(4)(A) “Title insurance agency” means a person that has an agency contract under Arkansas Code § 23-103-407 with a title insurer.

(B) “Person” means:

(i) An individual; or

(ii) Any:

(a) Partnership;

(b) Association;

(d) Corporation;

(e) Firm;

(f) Trust;

(g) Limited liability company; or

(h) Other legal entity.

(C) Every title insurance agency must be based in Arkansas and have a qualified or active title insurance agent affiliated with the title insurance agency;

(5)(A) “Title insurance agent” means an individual affiliated with a title insurance agency who is authorized on behalf of a title insurer to issue a title insurance report or title insurance policy and participates in the solicitation, negotiation, or sale of title insurance, including a licensed Arkansas resident or a licensed nonresident employed by a resident licensee, under the Arkansas Title Insurance Act, Arkansas Code § 23-103-401 et seq.

(B) “Authorized” means that the agent holds an appointment with the title insurer.

(C) “Insurance producer” includes title insurance agents for purposes of the Producer Licensing Model Act, Arkansas Code § 23-64-501 et seq.;

(6) "Title insurance policy" means a contract, including any coverage, enhancements to coverage, or endorsements, insuring or indemnifying owners of, or other persons lawfully interested in, personal or real property against loss or damage arising from any or all of the following conditions existing on, before, or subsequent to the policy date and not specifically excepted or excluded:

(A) Defects in or liens or encumbrances on the insured title;

(B) Unmarketability of the insured title;

(D) Title being vested other than as stated in the policy;

(E) Lack of a legal right of access to the land that is part of the insured title in a policy relating to real property;

(F) Lack of priority of the lien of any insured mortgage over any statutory lien for services, labor, or materials as specifically described in the policy;

(G) Invalidity or unenforceability of any assignment of an insured mortgage subject to certain conditions; or

(H) The priority of any lien or encumbrance over the lien of the insured mortgage; and

(7) “Title insurer” means a company authorized under the laws of this state to transact title insurance business.

23 CAR § 204-104 License qualifications {#sec-23-car-204-104 omnilex-key=us-ar-regs-official--title-23-part-204--23 CAR § 204-104}

23 CAR § 204-104. License qualifications.

(a) Eligibility.

(1) The license applicant must be at least eighteen (18) years of age or if not of legal age, minority rights must be removed by a court order and a copy of the court order must be forwarded along with the application and fees.

(2)(A) The applicant must be a resident of the State of Arkansas or a nonresident employed by a resident licensee.

(B) A “resident title insurance agent” means an agent whose residence is in or who may vote in this state or who is licensed as a resident insurance producer by the Insurance Commissioner in accordance with the Producer Licensing Model Act, Arkansas Code § 23-64-501 et seq.

(C) Residency by a title insurance agency must be demonstrated by a place of business accessible to the public wherein the licensee principally conducts transactions.

(D) A nonresident individual may be eligible for licensure if he or she is employed by a resident title insurance agency and meets the other eligibility requirements of this section.

(3) The applicant must be deemed by the commissioner to be competent, trustworthy, financially responsible, and of good personal and business reputation.

(4)(A) The applicant must have two thousand (2,000) hours of prior title work experience and must submit a notarized affidavit from the applicant’s current or prior employer attesting to same.

(B)(i) If unable to obtain verification from a prior employer, the applicant may request a waiver from the commissioner.

(ii) The request must specify the grounds to be relied upon as a basis for the waiver.

(5)(A) The applicant must pass a written examination demonstrating competence to act as a title insurance agent.

(B) The commissioner may give, conduct, and grade all examinations, or may arrange to have examinations administered and graded by an independent testing service, in a fair and impartial manner, and without unfair discrimination as between individuals examined.

(C) An oral or other type examination may for good cause be substituted for a written examination of the applicant on his or her written request, and if deemed necessary by any applicable laws, including, but not limited to, the Americans with Disabilities Act.

(D) The commissioner shall require a waiting period of thirty (30) days before reexamination of an applicant.

(6) The applicant for the title insurance license or renewal license shall be required to annually complete continuing education hours as established in 23 CAR § 204-105.

(7) The applicant shall be subject to a criminal background check as part of the application process.

(b) Application.

(1)(A) Each applicant for the title insurance agent’s license shall complete and submit the written application form, in a format prescribed by or acceptable to the commissioner, accompanied by the:

(i) Required notarized affidavit confirming title work experience of the applicant; and

(ii) Requisite fees established by a separate rule.

(B) Such fees shall be payable to “The State Insurance Department Trust Fund” and are nonrefundable.

(2)(A) Each applicant must complete an Arkansas State Police Individual Record Check Form (ASP-122) using the applicant’s full name and attach it to the State Insurance Department’s application for exam permit.

(B) The form must be signed and notarized by an Arkansas notary public.

(D) Payment for the ASP-122 cannot be in the form of a personal check.

(1)(A) The commissioner may issue the license for title insurance agents to individuals meeting all applicable qualifications of this part, including successful examinations and payment of proper fees.

(B) The commissioner shall issue a license on a form prescribed to the title insurance agent upon successful completion of these requirements by the applicant.

(D) Within one (1) year from issuance date, the license shall be renewable on or before the licensee's birthday, and annually on the birthday thereafter.

(E) For an agency license, the renewal date will be a date certain.

(2) The title insurance agent shall remit the annual renewal fee and Administrative and Regulatory Fees, 23 CAR pt. 22, as required in Acts 1997, No. 1004, on or before the licensee’s renewal date, under 23 CAR § 204-106, to the department made payable to “The State Insurance Department Trust Fund”.

(d) License continuation.

(1)(A) Licenses of individual persons granted title insurance agent licenses prior to the effective date of this part shall continue in full force and effect, but subject to the provisions of this part, including applicable residency requirements, and without the necessity to requalify hereunder except as to the effect or impact of licensing provisions as to felons under Acts 1997, No. 217, codified as Arkansas Code § 23-66-501 et seq.

(B) Current licensees shall be subject to a criminal background check.

(2)(A) A title insurance agent who allows his or her license to lapse may reinstate the same license within twelve (12) months after the due date of the renewal fee without the necessity of passing a written examination.

(B) However, a penalty in the amount of double the unpaid renewal fee shall be required for any renewal fee received after the due date.

(3)(A) A licensed title insurance agent who is unable to comply with license renewal procedures due to military service or some other extenuating circumstance may request a waiver of those procedures.

(B) The request must specify the grounds to be relied upon as a basis for the waiver.

(e) Laws applicable. Except where they conflict with the Arkansas Title Insurance Act, Arkansas Code § 23-103-401 et seq., or this part, title insurance agents will also be subject to the applicable provisions of the Arkansas Insurance Code, Arkansas Code § 23-64-101 et seq., and other department rules pertaining to insurance producers.

History

Codification Notes: The Americans with Disabilities Act is codified generally at 42 U.S.C. § 12101 et seq. Authorities: Arkansas Code § 23-103-415; Arkansas Code § 23-61-108; Arkansas Code § 23-61-706; Arkansas Code § 23-61-708

23 CAR § 204-105 Continuing education {#sec-23-car-204-105 omnilex-key=us-ar-regs-official--title-23-part-204--23 CAR § 204-105}

23 CAR § 204-105. Continuing education.

(a) Number of course hours. Upon the effective date of this part, any nonexempt persons licensed as title insurance agents shall, annually on or before their birthdays, complete those courses of continuing education instruction approved by the Insurance Commissioner and equivalent to a total of six (6) hours of instruction, which must include one (1) hour of ethics.

(b) Exemption period. Newly licensed title insurance agents must be licensed for one (1) full year prior to renewal of the license before continuing education requirements are imposed.

Example: If a new title insurance agent becomes licensed in June of 2010, and the expiration of the license is February 2, 2011, the producer must pay the renewal fee, but continuing education is not due until February 2, 2012, because the exemption period of one (1) year has not been reached prior to the 2011 expiration date.

(1) Upon failure of any title insurance agent to comply with Arkansas Code § 23-64-301 et seq., the commissioner shall take the steps enumerated in Arkansas Code § 23-64-304(d) against such individual’s license.

(2) Failure to comply with this part may result in imposition of penalties contained in Arkansas Code § 23-64-216, as amended, or other applicable laws or rules.

(d) Course approval and valuation.

(1) Subject to submission and approval of the commissioner, the courses or programs of instruction successfully completed that shall be deemed to meet the commissioner’s standards for title continuing education requirements and meeting the continuing education requirements of Continuing Education for Producers and Adjusters, 23 CAR pt. 18, are:

(A) Any title insurance-related course approved by the commissioner and offered by an accredited college or university;

(B) Any course or program of instruction, seminar, or meeting sponsored by any:

(i) Authorized insurer;

(ii) Recognized title insurance agent association;

(iii) Insurance trade association; or

(iv) Independent program of instruction;

(C)(i) Subject to approval by the commissioner, the active annual membership of the licensed title producer in local, regional, state, or national professional insurance organizations or associations may be approved for up to two (2) annual hours of instruction.

(ii) These hours shall be credited upon timely filing with the commissioner by roster from the member organization or association;

(D) Any title insurance correspondence course with a proctored exam that meets the standards of a correspondence course established in 23 CAR pt. 18; and

(E) Any part of the study for an industry recognized professional designation for title insurance professionals.

(2) Course hour valuation. The commissioner shall assign the number of continuing education hours for which approved courses qualify based on standards established in 23 CAR pt. 18.

23 CAR § 204-106 Fees {#sec-23-car-204-106 omnilex-key=us-ar-regs-official--title-23-part-204--23 CAR § 204-106}

23 CAR § 204-106. Fees.

Fees shall be established by a separate rule.

23 CAR § 204-107 Revocation and suspension of license {#sec-23-car-204-107 omnilex-key=us-ar-regs-official--title-23-part-204--23 CAR § 204-107}

23 CAR § 204-107. Revocation and suspension of license.

(a)(1) The Insurance Commissioner may suspend or revoke upon notice and a hearing, or nonrenew or refuse to continue without notice and a hearing, the license of any title insurance agent who has failed to comply with the license continuation provisions of this part and Arkansas Code § 23-64-301 et seq., including failure of the title insurance agent to remit or timely remit the annual fees to the commissioner.

(2) Alternatively, the commissioner may, in his or her discretion, impose a monetary penalty in the amounts contained in Arkansas Code § 23-64-304.

(b) The commissioner may suspend, revoke, or nonrenew or refuse to continue the license of any title insurance agent who is:

(1) In violation of or noncompliance with the:

(A) Provisions of the unfair trade practices laws of the state under the Trade Practices Act, Arkansas Code § 23-66-201 et seq., and Arkansas Code § 23-66-301 et seq.; or

(B) License provisions under Arkansas Code § 23-64-101 et seq., and Arkansas Code § 23-64-501 et seq., particularly Arkansas Code § 23-64-512; or

(2) In violation of the:

(A) Laws of the State of Arkansas;

(B) Arkansas Insurance Code; or

(1) Arkansas Administrative Procedure Act, Arkansas Code § 25-15-201 et seq., as applicable; or

(2) Provisions of the Arkansas Insurance Code under Arkansas Code § 23-61-301 et seq.

(d) Upon any revocation, suspension, cancellation, expiration, or lapse, the title insurance agent license shall be returned to the department as the property of the State of Arkansas.

23 CAR § 204-108 Title insurance agent restrictions {#sec-23-car-204-108 omnilex-key=us-ar-regs-official--title-23-part-204--23 CAR § 204-108}

23 CAR § 204-108. Title insurance agent restrictions.

A licensed title insurance agent is not allowed to:

(1) Bind reinsurance on behalf of the title insurer;

(2) Permit any of its directors, officers, controlling shareholders, or employees to serve on the title insurers’ board of directors if the title insurance agent wrote five percent (5%) or more of the direct premiums of the title insurer written in the previous calendar year as shown on the title insurer's most recent annual statement filed with the Insurance Commissioner, unless the title insurer and title insurance agent are under common control or ownership;

(3) Jointly employ an individual who is employed with the title insurer unless the title insurer and the title insurance agent are under common control or ownership;

(4) Issue a title insurance report or policy insuring the interest of an insured in real property in this state unless the title insurance agent is properly licensed and the title insurance report or policy is signed by a properly licensed title insurance agent; or

(5)(A) Provide legal advice concerning the status of title to the property described in the title commitment, unless the title insurance agent is a licensed Arkansas attorney.

(B) Complaints alleging unauthorized practice of law will be referred to the office of the Supreme Court Committee on Professional Conduct.

23 CAR § 204-109 Title insurance policies {#sec-23-car-204-109 omnilex-key=us-ar-regs-official--title-23-part-204--23 CAR § 204-109}

23 CAR § 204-109. Title insurance policies.

(a) No title insurance policy or application form when written application is required and is to be made part of the policy shall be issued, delivered, or used as to a subject of insurance located in this state unless the form has been filed by the title insurer with and approved by the Insurance Commissioner in accordance with Arkansas Code § 23-79-109.

(b) Every title insurance report or policy shall be executed in the name of and on behalf of the title insurer by its officer, attorney-in-fact, or employee and countersigned by a licensed title insurance agent affiliated with a licensed title insurance agency and authorized by the insurer.

(d) The license number of the title insurance agent countersigning a title insurance report or policy shall be printed or legibly written beneath the title insurance agent’s signature.

(e) The printed names and license numbers of the title insurance agency and the affiliated title insurance agent authorized to issue the report or policy on behalf of the title insurer shall appear on all reports and policies issued by the title insurance agency.

(f) Any title insurance policy issued and otherwise valid that contains any condition or provision not in compliance with the requirements of the Arkansas Insurance Code shall not be rendered invalid, but shall be construed and applied with such conditions and provisions as would have applied had the policy been in full compliance with the Arkansas Insurance Code.

(g) The review, approval, disapproval, and withdrawal of any prior approval by the Insurance Commissioner of any title insurance policy form shall be done in accordance with Arkansas Code § 23-79-109, Arkansas Code § 23-79-110, and Arkansas Code § 23-61-301 et seq.

23 CAR § 204-110 Inventory maintenance {#sec-23-car-204-110 omnilex-key=us-ar-regs-official--title-23-part-204--23 CAR § 204-110}

23 CAR § 204-110. Inventory maintenance.

(a) The title insurer and the title insurance agency shall each maintain an inventory of all numbered policy forms or policy numbers assigned to the title insurance agency by the title insurer.

(b) If title insurance policies are generated electronically by the title insurer, the title insurer shall maintain the inventory of policy numbers assigned to the title insurance agency.

23 CAR § 204-111 Audit {#sec-23-car-204-111 omnilex-key=us-ar-regs-official--title-23-part-204--23 CAR § 204-111}

23 CAR § 204-111. Audit.

(a) Minimum requirements.

(1) At least one (1) time each year, a title insurer shall conduct an on-site audit of its appointees’ escrow accounts, security arrangements, files, underwriting and claims practices, closing protection letters, and policy inventory of the title insurance agencies that it has authorized to issue title insurance reports or policies on its behalf.

(2) If the title insurance agency fails to maintain separate escrow or trust accounts for each title insurer it represents, the title insurer shall verify that the funds related to closings in which the title insurer's policies are issued are reasonably ascertainable from the books of account and records of the title insurance agency.

(b) A combined audit must encompass the activities of all affiliates to which title insurance agents or title insurance agencies are appointed.

23 CAR § 204-112 Record retention {#sec-23-car-204-112 omnilex-key=us-ar-regs-official--title-23-part-204--23 CAR § 204-112}

23 CAR § 204-112. Record retention.

The title insurer and the title insurance agency shall maintain sufficient records of their affairs, including evidence of underwriting title, determination of insurability, and records of their escrow operations and escrow accounts for a period of time no less than seven (7) years.

23 CAR § 204-113 Settlement or closing protection {#sec-23-car-204-113 omnilex-key=us-ar-regs-official--title-23-part-204--23 CAR § 204-113}

23 CAR § 204-113. Settlement or closing protection.

(a) The title insurance agency, on behalf of the title insurer, shall:

(1) Offer settlement or closing protection coverage to the parties; and

(2) Obtain their election in writing.

(b)(1) Settlement or closing protection letters shall, if requested by a party to a closing handled by the title insurance agency, be issued to the requesting party for a charge payable solely to the insurer and may indemnify against loss of settlement funds that occur in connection with the closing, including theft of settlement funds and failure to comply with written closing instructions.

(2) Nothing herein limits or restricts title insurers from offering greater coverage.

(c) The form and amount charged by a title insurer for settlement or closing protection coverage shall be filed with the Insurance Commissioner at least twenty (20) days before the first use of settlement or closing protection coverage in the market in accordance with Arkansas Code § 23-103-405(c)(4).

(d) Every settlement or closing protection letter shall include, at a minimum, the following provisions, coverages, and exclusions:

(1) The parties to be afforded protection along with a brief description of their relationship to the transaction covered;

(2) A description of the transaction for which the letter is being issued;

(3) Provide coverage for the theft or misappropriation of closing funds or for the failure of the title insurance agent or any title insurance agency conducting a closing of the transaction to comply with any written closing instructions to the extent that they relate to:

(A) The status of the title to said interest in land or the validity, enforceability, and priority of any lien of a mortgage on this interest in land, including obtaining any documents or the disbursement of funds necessary to establish such status of title or lien;

(B) Obtaining any other document specifically required by any party to the transaction, but only to the extent the failure to obtain such other document affects the status of the title to said interest in land or the validity, enforceability, and priority of the lien of any mortgage on the interest in land; or

(C) Fraud in handling of any documents in connection with such closings to the extent such fraud relates to the status of the title to said interest in land or to the validity, enforceability, and priority of the lien of any mortgage on the interest in land;

(4) A provision that if the letter is issued at the request of a lender that its assignees, successors, assigns, debtors, and warehouse lenders shall be protected as if the letter were requested by and directed to them by the title insurer;

(5)(A) A provision allowing the title insurer to be subrogated to all rights and remedies that a party recovering under the letter would have had against any person or property had the party not been so reimbursed.

(B) The liability of the title insurer for any amounts paid to a party shall be reduced to the extent that the party has knowingly and voluntarily impaired the value of such right of subrogation;

(6)(A) A provision allowing the title insurer the ability to recover from the party asserting a claim under the letter for any reimbursement such party received for which the insurer has previously paid the party under the letter.

(B) The liability of the title insurer for any amounts paid to a party shall be reduced to the extent that the party has knowingly and voluntarily impaired the value of such right to such reimbursement;

(7) A provision providing any liability of the title insurer for loss incurred by a party in connection with the closing of the transaction by a title insurance agent, agency, or person closing the transaction may be limited to the protection provided by the letter, but shall not affect the protection afforded by a title insurance binder, commitment, or policy of the title insurer;

(8)(A) That claims under the letter shall be made promptly to the title insurer at its principal office as set forth in the letter.

(B) When the failure to give prompt notice shall diminish the amount the title insurer could have recovered in the absence of the delay, the liability of the title insurer hereunder may be reduced to the extent of such diminution;

(9) Provide the state or states to which the coverage afforded by the letter applies; and

(10) May contain one (1) or more of the following exclusions that will relieve the title insurer issuing the letter from liability thereunder:

(A)(i) Failure of the title insurance agent, agency, or person closing the transaction to comply with any closing instructions that require title insurance protection inconsistent with that set forth in the title insurance binder or commitment issued by the title insurer.

(ii) Instructions that require the removal of specific exceptions to title or compliance with the requirements contained in said binder or commitment shall not be deemed to be inconsistent;

(B) Loss or impairment of any funds in the course of collection or while on deposit with a bank due to bank failure, insolvency, or suspension, except such as shall result from failure of the title insurance agent, agency, or person closing the transaction, to comply with any written closing instructions to deposit the funds into a bank that you designated by name;

(C) Mechanics' and materialmen's liens in connection with the transaction, except to the extent that protection against such liens are afforded by a title insurance binder, commitment, or policy of the title insurer;

(D) Failure of the title insurance agent, agency, or person closing the transaction to comply with any written closing instructions to the extent such instructions require a determination by the title insurance agent, agency, or person closing the transaction of the validity, enforceability, or effectiveness of any document contemplated under subdivision (d)(3)(B) of this section;

(E) A settlement or release of any claim without the written consent of the title insurer;

(F) Any matters created, suffered, assumed or agreed to by, or known by any party to the transaction; or

(G) Any exclusion approved by the commissioner.

23 CAR § 204-114 Minimum search requirements {#sec-23-car-204-114 omnilex-key=us-ar-regs-official--title-23-part-204--23 CAR § 204-114}

23 CAR § 204-114. Minimum search requirements.

(a)(1) The title insurance report or policy shall be based upon a search of the title from the evidence prepared from a title plant or from the records of the clerk or the ex-officio recorder of the land records of the county that maintains records relating to real estate.

(2) No title insurance policy shall be issued until the title insurer or title insurance agent has caused to be made a determination of insurability of title in accordance with the title insurer’s underwriting practices.

(b) The search must include a review of all matters affecting title to the property or interest for a continuous period of no less than the preceding thirty (30) years.

(1) Any policy upon which the title insurance agent is willing to rely, subject to a determination of insurability of title in accordance with the title insurer’s underwriting practices;

(2) Abstracts of title;

(3) Title plant records;

(4) County records of the ex-officio recorder; or

(5) Any combination thereof that cover a continuous period of no less than the immediately preceding thirty (30) years.

23 CAR § 204-115 Duties of title insurers {#sec-23-car-204-115 omnilex-key=us-ar-regs-official--title-23-part-204--23 CAR § 204-115}

23 CAR § 204-115. Duties of title insurers.

(a) The title insurer shall not accept business from a title insurance agency unless there is in force a written contract between the parties which sets forth the responsibilities of each party and, where both parties share responsibility for a particular function, specifies the division of responsibilities.

(b)(1) The title insurer shall, at least annually, conduct an on-site audit of its appointees’ underwriting, claims, and escrow practices, which shall include a review of the title insurance agency’s policy blank inventory and processing operations.

(2) If the title insurance agency does not maintain separate bank or trust accounts for each title insurer it represents, the title insurer shall verify that the funds held on its behalf are reasonably ascertainable from the books of account and records of the title insurance agent.

(3) A combined audit must encompass the activities of all affiliates to which title insurance agents or title insurance agencies are appointed.

(c)(1) Within thirty (30) days of executing or terminating a contract with a title insurance agency, the title insurer shall provide written notification of the appointment or termination and the reason for termination to the Insurance Commissioner.

(2) Notices of appointment of a title insurance agency shall be made on a form promulgated by the commissioner.

(d)(1) A title insurer shall not appoint to its board of directors an officer, director, employee, or controlling shareholder or any title insurance agent who wrote five percent (5%) or more of the title insurer’s direct premiums written during the previous calendar year as shown on the title insurer’s most recent annual statement on file with the commissioner.

(2) This subsection shall not apply to relationships governed by the Insurance Holding Company Regulatory Act, Arkansas Code § 23-63-501 et seq.

(e) The title insurer shall maintain an inventory of all policy forms or policy numbers allocated to each title insurance agency.

(f) The title insurer shall have on file proof that the title insurance agency and its affiliated title insurance agent or agents are licensed by this state.

(g) The title insurer shall establish the underwriting guidelines and, where applicable, limitations on title claims settlement authority to be incorporated into contracts with its title insurance agencies.

23 CAR § 204-116 Premium for purposes of determining the proper premium tax due from title insurers {#sec-23-car-204-116 omnilex-key=us-ar-regs-official--title-23-part-204--23 CAR § 204-116}

23 CAR § 204-116. Premium for purposes of determining the proper premium tax due from title insurers.

(a)(1) Arkansas Code § 23-67-203 prohibits the Insurance Commissioner from requiring that rates or premiums related to the sale of title insurance be filed by either a title insurer or title insurance agent or otherwise being subject to review, except for the requirement under Arkansas Code § 23-103-405(c), regarding informational filings respecting the fees charged for closing protection letters.

(2) Title insurance premium, as defined by Arkansas Code § 23-103-402(14), only applies when determining the appropriate amount of premium tax due and not to the premiums, charges, or fees charged by title insurance agents to the consumer.

(b) For the sole purpose of determining the correct amount of premium tax due the State of Arkansas from an insurance company licensed to write title insurance, “title insurance premium” means the funds paid to the title insurer as consideration for the amount of liability that is assumed by the title insurer under the title insurance policy.

(c)(1) “Title insurance premium” does not include the underwriting and operating expenses of the title insurance agent that may be charged to the consumer in excess of this risk retained by the insurer regardless of how denominated by the title insurance agent.

(2) Examples of charges that are not title insurance premiums are:

(A) Title search, abstracting, or examination of title;

(B) Obtaining a title opinion;

(D) Escrow or closing fees;

(E) Notary fees;

(F) Fees incurred to cure defects in title;

(G) Tax report or tax certification fees;

(H) Title report fees;

(I) Processing fees;

(J) Courier fees; and

(K) Fees incident to the issuance of a title insurance report or policy.

23 CAR Part 204 — Title Insurance