FIRST REGULAR SESSION

SENATE BILL NO. 355

90TH GENERAL ASSEMBLY

INTRODUCED BY SENATOR MAXWELL.

Read 1st time January 26, 1999, and 1,000 copies ordered printed.

TERRY L. SPIELER, Secretary.

L1640.01I

AN ACT

To repeal sections 381.011, 381.021, 381.041, 381.051, 381.061, 381.071, 381.081, 381.091, 381.101, 381.111, 381.121, 381.131, 381.141, 381.151, 381.161, 381.171, 381.181, 381.191, 381.201, 381.211, 381.221 and 381.241, RSMo 1994, and sections 381.031, 381.231, 381.410 and 381.412, RSMo Supp. 1998, relating to the Missouri title insurance act, and to enact in lieu thereof thirty-seven new sections relating to the same subject, with penalty provisions and an effective date.

Section A.  Sections 381.011, 381.021, 381.041, 381.051, 381.061, 381.071, 381.081, 381.091, 381.101, 381.111, 381.121, 381.131, 381.141, 381.151, 381.161, 381.171, 381.181, 381.191, 381.201, 381.211, 381.221 and 381.241, RSMo 1994, and sections 381.031, 381.231, 381.410 and 381.412, RSMo Supp. 1998, are repealed and thirty-seven new sections enacted in lieu thereof, to be known as sections 381.003, 381.009, 381.012, 381.015, 381.018, 381.022, 381.025, 381.028, 381.032, 381.035, 381.038, 381.042, 381.045, 381.048, 381.052, 381.055, 381.058, 381.062, 381.065, 381.068, 381.072, 381.075, 381.078, 381.082, 381.085, 381.088, 381.092, 381.095, 381.098, 381.102, 381.105, 381.108, 381.112, 381.115, 381.118, 381.122 and 381.125, to read as follows:

381.003.  1.  Sections 381.003 to 381.125 shall be known and may be cited as the "Missouri Title Insurance Act".

2.  Sections 381.009 to 381.048 shall apply to all persons engaged in the business of title insurance in this state.  Sections 381.052 to 381.112 shall apply to all title insurers engaged in the business of title insurance in this state.  Sections 381.115 to 381.125 shall apply to all title agents engaged in the business of title insurance in this state.

3.  Except as otherwise expressly provided in this chapter, and except where the context otherwise requires, all provisions of the insurance code applying to insurance and insurance companies generally shall apply to title insurance, title insurers and title agents.

381.009.  As used in this chapter, the following terms mean:

(1)  "Abstract of title" or "abstract", a written history, synopsis or summary of the recorded instruments affecting the title to real property;

(2)  "Affiliate", a specific person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified;

(3)  "Affiliated business", any portion of a title insurance agent's business written in this state that was referred to it by a producer of title insurance business or by an associate of the producer, where the producer or associate, or both, have a financial interest in the title agent;

(4)  "Associate", any:

(a)  Business organized for profit in which a producer of title business is a director, officer, partner, employee or an owner of a financial interest;

(b)  Employee of a producer of title business;

(c)  Franchisor or franchisee of a producer of title business;

(d)  Spouse, parent or child of a producer of title insurance business who is a natural person;

(e)  Person, other than a natural person, that controls, is controlled by, or is under common control with, a producer of title business;

(f)  Person with whom a producer of title insurance business or any associate of the producer has an agreement, arrangement or understanding, or pursues a course of conduct, the purpose or effect of which is to provide financial benefits to that producer or associate for the referral of business;

(5)  "Bona fide employee of the title insurer", an individual who devotes substantially all of his or her time to performing services on behalf of a title insurer or title insurance agent and whose compensation for those services is in the form of salary or its equivalent paid by the title insurer or title insurance agent;

(6)  "Control", including the terms "controlling", "controlled by" and "under common control with", the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position or corporate office held by the person.  Control shall be presumed to exist if a person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, ten percent or more of the voting securities of another person.  This presumption may be rebutted by showing that control does not exist in fact.  The director may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support the determination, that control exists in fact, notwithstanding the absence of a presumption to that effect;

(7)  "County" or "counties" includes a city not within a county;

(8)  "Direct operations", that portion of a title insurer's operations which are attributable to business written by a bona fide employee;

(9)  "Director", the director of the department of insurance, or the director's representatives;

(10)  "Escrow", written instruments, money or other items deposited by one party with a depository, escrow agent or escrowee for delivery to another party upon the performance of a specified condition or the happening of a certain event;

(11)  "Escrow, settlement or closing fee", the consideration for supervising or handling the actual execution, delivery or recording of transfer and lien documents and for disbursing funds;

(12)  "Financial interest", a direct or indirect interest, legal or beneficial, where the holder is or will be entitled to five percent or more of the net profits or net worth of the entity in which the interest is held;

(13)  "Foreign title insurer", any title insurer incorporated or organized under the laws of any other state of the United States, the District of Columbia, or any other jurisdiction of the United States;

(14)  "Geographically indexed or retrievable", a system of keeping recorded documents which includes as a component a method for discovery of the documents by:

(a)  Searching an index arranged according to the description of the affected land; or

(b)  An electronic search by description of the affected land;

(15)  "Net retained liability", the total liability retained by a title insurer for a single risk, after taking into account any ceded liability and collateral, acceptable to the director, maintained by the insurer;

(16)  "Non-U.S. title insurer", any title insurer incorporated or organized under the laws of any foreign nation or any province or territory;

(17)  "Premium", the consideration paid by or on behalf of the insured for the issuance of a title insurance policy or any endorsement or special coverage.  It does not include consideration paid for settlement or escrow services or noninsurance-related information services;

(18)  "Producer", any person, including any officer, director or owner of five percent or more of the equity or capital of any person, engaged in this state in the trade, business, occupation or profession of:

(a)  Buying or selling interests in real property;

(b)  Making loans secured by interests in real property; or

(c)  Acting as broker, agent, representative or attorney of a person who buys or sells any interest in real property or who lends or borrows money with the interest as security;

(19)  "Qualified financial institution", an institution that is:

(a)  Organized or, in the case of a United States branch or agency office of a foreign banking organization, licensed under the laws of the United States or any state and has been granted authority to operate with fiduciary powers;

(b)  Regulated, supervised and examined by federal or state authorities having regulatory authority over banks and trust companies;

(c)  Insured by the appropriate federal entity; and

(d)  Qualified under any additional rules established by the director;

(20)  "Referral", the directing or the exercising of any power or influence over the direction of title insurance business, whether or not the consent or approval of any other person is sought or obtained with respect to the referral;

(21)  "Search", "search of the public records" or "search of title", a search of those records established by the laws of this state for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without knowledge;

(22)  "Security" or "security deposit", funds or other property received by the title insurer as collateral to secure an indemnitor's obligation under an indemnity agreement pursuant to which the insurer is granted a perfected security interest in the collateral in exchange for agreeing to provide coverage in a title insurance policy for a specific title exception to coverage;

(23)  "Subsidiary", an affiliate controlled by a person directly or indirectly through one or more intermediaries;

(24)  "Title agent" or "agent", an authorized person, other than a bona fide employee of the title insurer who, on behalf of the title insurer, performs one or more of the following acts, in conjunction with the issuance of a title insurance commitment or policy:

(a)  Determines insurability, based upon a review of a search of title;

(b)  Performs searches;

(c)  Handles escrows, settlements or closings; or

(d)  Solicits or negotiates title insurance business;

(25)  "Title insurance business" or "business of title insurance":

(a)  Issuing as insurer or offering to issue as insurer a title insurance policy;

(b)  Transacting or proposing to transact by a title insurer any of the following activities when conducted or performed in contemplation of and in conjunction with the issuance of a title insurance policy:

a.  Soliciting or negotiating the issuance of a title insurance policy;

b.  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;

c.  Handling of escrows, settlements or closings;

d.  Executing title insurance policies;

e.  Effecting contracts of reinsurance; or

f.  Abstracting, searching or examining titles;

(c)  Guaranteeing, warranting or insuring searches or examinations of title to real property or any interest in real property;

(d)  Guaranteeing or warranting the status of title as to ownership of or liens on real property by any person other than the principals to the transaction;

(e)  Promising to purchase or repurchase for consideration an indebtedness because of a title defect, whether or not involving a transfer of risk to a third person; or

(f)  Promising to indemnify the holder of a mortgage or deed of trust against loss from the failure of the borrower to pay the mortgage or deed of trust when due if the property fails to yield sufficient proceeds upon foreclosure to satisfy the debt, when one or both of the following conditions exists:

a.  The security has been impaired by the discovery of a previously unknown property interest in favor of one who is not liable for the payment of the mortgage or deed of trust; or

b.  Perfection of the position of the mortgage or deed of trust which was assured to exist cannot be obtained, notwithstanding timely recordation with the recorder of deeds of the county in which the property is located;

(g)  Doing or proposing to do any business substantially equivalent to any of the activities listed in this subdivision in a manner designed to evade the provisions of this chapter;

(26)  "Title insurance commitment" or "commitment", a preliminary report, commitment or binder issued prior to the issuance of a title insurance policy containing the terms, conditions, exceptions and other matters incorporated by reference under which the title insurer is willing to issue its title insurance policy.  A title insurance commitment is not an abstract of title;

(27)  "Title insurance policy" or "policy", a contract insuring or indemnifying owners of, or other persons lawfully interested in, real property or any interest in real property, against loss or damage arising from any or all of the following conditions existing on or before the policy date and not excepted or excluded:

(a)  Title to the estate or interest in land being otherwise than as stated in the policy;

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

(c)  Unmarketability of the insured title;

(d)  Lack of legal right of access to the land;

(e)  Invalidity or unenforceability of the lien of an insured mortgage;

(f)  The priority of a lien or encumbrance over the lien of any insured mortgage;

(g)  The lack of priority of the lien of an insured mortgage over a statutory lien for services, labor or material;

(h)  The invalidity or unenforceability of an assignment of the insured mortgage; or

(i)  Rights or claims relating to the use of or title to the land;

(28)  "Title insurer" or "insurer", a company organized under laws of this state for the purpose of transacting the business of title insurance and any foreign or non-U.S. title insurer licensed in this state to transact the business of title insurance;

(29)  "Title plant", a set of records encompassing at least the most recent forty-five years, consisting of documents, maps, surveys or entries affecting title to real property or any interest in or encumbrance on the property, which have been filed or recorded in the jurisdiction for which the title plant is established or maintained.  The records in the title plant shall be geographically indexed or retrievable as to those records containing a legal description of affected land, and otherwise by name of affected person;

(30)  "Underwrite", the authority to accept or reject risk on behalf of the title insurer.

381.012.  1.  No title insurance policy shall be written unless and until the issuing title insurer or title agent has caused a search of title to be made for the benefit of the title insurer or title agent from the evidence prepared from a title plant of the county where the property is located as herein defined, except as hereinafter provided.

2.  If no such title plant of the county exists, or the owner of such plant refuses to furnish the title insurer or title agent desiring to insure, such title evidence at a reasonable charge and within a reasonable period of time, then such policy of title insurance shall be based upon the best title evidence available.  No title insurer through its direct operations nor any title agent shall issue more than twelve title insurance policies, not counting simultaneously issued policies, on land in any given county in a calendar year, based upon the unavailability of title plant access at a reasonable charge or within a reasonable time unless such title insurer or title agent shall continue to maintain or thereupon commence building and maintain a title plant on a prospective basis for the county in which plant service is not available at a reasonable cost or within a reasonable time.

3.  An attorney licensed to practice law in this state and licensed as a title insurance agent may upon personal inspection use the best evidence available in any county and is not subject to the provisions of the title plant requirements of this section.

4.  In any county in which the recorder of deeds maintains records in a manner which meets the definition of title plant, title insurers and title agents shall be permitted to issue title insurance on land in such county based on a search of such records.

5.  No title insurance policy shall be written unless and until the issuing title insurer or title agent has caused to be made a determination of insurability of title for the benefit of the title insurer or title agent in accordance with sound underwriting practices.

6.  Each violation of any provision of this section is a class B violation as that term is defined in section 381.045.

381.015.  1.  When a title insurance commitment issued by a title insurer or title agent includes an offer to issue an owner's policy covering the resale of owner-occupied residential property, the commitment shall incorporate the following statement in bold type:

"Please read the exceptions and the terms shown or referred to herein carefully.  The exceptions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered."

2.  A title insurer or title agent issuing a lender's title insurance policy in conjunction with a mortgage loan made simultaneously with the purchase of all or part of the real estate securing the loan, where no owner's title insurance policy has been requested, shall give written notice, on a form prescribed or approved by the director, to the purchaser-mortgagor at the time the commitment is prepared.  The notice shall explain that a lender's title insurance policy is to be issued protecting the mortgage-lender, and that the policy does not provide title insurance protection to the purchaser-mortgagor as the owner of the property being purchased.  The notice shall explain what a title policy insures against and what possible exposures exist for the purchaser-mortgagor that could be insured against through the purchase of an owner's policy.  The notice shall also explain that the purchaser-mortgagor may obtain an owner's title insurance policy protecting the property owner at a specified cost or approximate cost, if the proposed coverages or amount of insurance is not then known.  A copy of the notice, signed by the purchaser-mortgagor, shall be retained in the relevant underwriting file at least fifteen years after the effective date of the policy.

3.  Each violation of any provision of this section is a class C violation as that term is defined in section 381.045.

381.018.  1.  The title insurer shall not allow the issuance of its commitments or policies by a title insurance agent 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.

2.  For each title insurance agent under contract with the insurer, the title insurer shall have on file a statement of financial condition, of each title insurance agent as of the end of the previous calendar or fiscal year setting forth an income statement of business done during the preceding year and a balance sheet showing the condition of its affairs as of the close of the prior year, certified by the agent as being a true and accurate representation of the agent's financial condition.  The statement shall be filed with the insurer no later than the date the agent's federal income tax return for the same year is filed.  Attorneys actively engaged in the practice of law, other than that related to title insurance business, are exempt from the requirements of this subsection.

3.  The title insurer shall conduct reviews of the underwriting, claims and escrow practices of its agents which shall include a review of the agent's policy blank inventory and processing operations.  If the title agent 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 agent.  The title insurer shall conduct a review of each of its agents at least triennially commencing January first of the year first following the effective date of section A of this act.

4.  Within thirty days of executing or terminating a contract with a title insurance agent, the insurer shall provide written notification of the appointment or termination and the reason for termination to the director.  Notices of appointment of a title insurance agent shall be made on a form promulgated by the director.

5.  The title insurer shall maintain an inventory of all policy numbers allocated to each title insurance agent.

6.  The title insurer shall have on file proof that the title insurance agent is licensed by this state.

7.  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 agents.

8.  Each violation of any provision of this section is a class B violation as that term is defined in section 381.045.

381.022.  1.  A title insurer or title agent may operate as an escrow, security, settlement or closing agent, provided that:

(1)  All funds deposited with the title insurer or title agent in connection with any escrow, settlement, closing or security deposit shall be submitted for collection to or deposited in a separate fiduciary trust account or accounts in a qualified financial institution no later than the close of the next business day after receipt, in accordance with the following requirements:

(a)  The funds shall be the property of the person or persons entitled to them under the provisions of the escrow, settlement, security deposit or closing agreement and shall be segregated for each depository by escrow, settlement, security deposit or closing in the records of the title insurer or title agent in a manner that permits the funds to be identified on an individual basis; and with the terms of the individual instructions or agreements under which the funds were accepted; and

(b)  The funds shall be applied only in accordance with the terms of the individual instructions or agreements under which the funds were accepted;

(2)  Funds held in an escrow account shall be disbursed only pursuant to a written instruction or agreement specifying under what conditions and to whom such funds may be disbursed or pursuant to an order of a court of competent jurisdiction;

(3)  Funds held in a security deposit account shall be disbursed only pursuant to a written agreement specifying:

(a)  What actions the indemnitor shall take to satisfy his or her obligation under the agreement;

(b)  The duties of the title insurer or title agent with respect to disposition of the funds held, including a requirement to maintain evidence of the disposition of the title exception before any balance may be paid over to the depositing party or his or her designee; and

(c)  Any other provisions the director may require;

(4)  Any interest received on funds deposited in connection with any escrow, settlement, security deposit or closing may be retained by the title insurer or title agent as compensation for administration of the escrow or security deposit, unless the instructions for the funds or a governing statute provides otherwise;

(5)  Disbursements may be made out of an escrow, settlement or closing account only if deposits in amounts at least equal to the disbursement have first been made directly relating to the transaction disbursed against and if the deposits are in one of the following forms:

(a)  Cash;

(b)  Wire transfers such that the funds are unconditionally received by the title insurer or title agent or its depository;

(c)  Checks, drafts, negotiable orders of withdrawal, money orders and any other item that has been finally paid before any disbursements;

(d)  A depository check, including a certified check, governed by the provisions of the Federal Expedited Funds Availability Act, 12 U.S.C. Section 4001, et seq.; or

(e)  Credit transfers through the automated clearing house which have been deemed available by the depository institution receiving the credits.  The credits must conform to the operating rules set forth by the National Automated Clearing House Association;

(6)  Each violation of this subsection is a class A violation as that term is defined in section 381.045.

2.  The title insurance agent shall cooperate with its underwriters in the conduct by the underwriters of reviews of the agent's escrow, settlement, closing and security deposit accounts.  The title insurer shall provide a copy of the report of each such review it performs to the director.  The director may promulgate rules setting forth the minimum threshold level at which a review would be required, the standards thereof and the form of report required.  Title insurance agents who are attorneys and who issue title insurance policies as part of their legal representation of clients are exempt from requirements of this subdivision.  However, the title insurer may, at its expense, conduct or cause to be conducted an annual audit of the escrow, settlement, closing and security deposit accounts of the attorney.  Attorneys who are exclusively in the business of title insurance are not exempt from the requirements of this subdivision.

3.  If the title insurance agent is appointed by two or more title insurers and maintains fiduciary trust accounts in connection with providing escrow, closing settlement services, the title insurance agent shall allow each title insurer reasonable access to the accounts and any or all of the supporting account information in order to ascertain the safety and security of the funds held by the title insurance agent.

4.  (1)  Nothing in this chapter shall be deemed to prohibit the recording of documents prior to the time funds are available for disbursement with respect to a transaction in which a title insurer or title agent is the settlement agent, provided all parties to whom payment will become due upon such recording consent thereto in writing;

(2)  The settlement agent shall record all deeds and security instruments for real estate closings handled by it within three business days after completion of all conditions precedent thereto;

(3)  Each violation of this subsection is a class C violation as that term is defined in section 381.045.

5.  Nothing in this chapter is intended to amend, alter or supersede other sections of this chapter, or the laws of this state or the United States, regarding an escrow holder's duties and obligations.

381.025.  1.  A title insurer, title agent or other person shall not give or receive, directly or indirectly, any consideration for the referral of title insurance business or escrow or other service provided by a title insurer or title agent.  Each violation of this subsection is a class A violation as that term is defined in section 381.045.

2.  Any title insurer or title agent doing business in the same county as a title insurer or title agent who may be in violation of the prohibitions or limitations of this section shall have a cause of action against the violating title insurer or title agent or recipient and, upon establishing the existence of a violation, shall be entitled to injunctive relief as the court may deem necessary or desirable to prevent violations of this section in the future.  In any action pursuant to this subsection, the court may award to the successful party the court costs of the action together with reasonable attorney fees.

381.028.  No title insurer or title agent shall participate in any transaction in which it knows that a producer or other person requires, directly or indirectly, or through any trustee, director, officer, agent, employee or affiliate, as a condition, agreement or understanding to selling or furnishing any other person a loan, or loan extension, credit, sale, property, contract, lease or service, that the other person shall place a title insurance policy of any kind with the title insurer or through a particular title insurance agent.  Each violation of this section is a class A violation as that term is defined in section 381.045.

381.032.  1.  No title insurer may charge any rates regulated by the state after the effective date of section A of this act, except in accordance with the premium rate schedule and manual filed with and approved by the director in accordance with applicable statutes and regulations governing rate filings.  Premium rate schedules in effect prior to the effective date of section A of this act may be used until new rate schedules have been approved by the director.  Title insurers shall file their premium rate schedules within thirty days after the effective date of section A of this act.  Each violation of this subsection is a class C violation as that term is defined in section 381.045.

2.  The director may establish rules, including rules providing statistical plans, for use by all title insurers and title agents in the recording and reporting of revenue, loss and expense experience in such form and detail as is necessary to aid the director in the establishment of rates and fees.

3.  The director may require that the information provided pursuant to this section be verified by oath of the insurer's or agent's president or vice president or secretary or actuary, as applicable.  The director may further require that the information required pursuant to this section be subject to an audit conducted at the expense of the title insurer or title agent by an independent certified public accountant.  The director shall have the authority to establish a minimum threshold level at which an audit would be required.

4.  Information filed with the director relating to the experience of a particular agent shall be kept confidential unless the director finds it in the public interest to disclose the information required of title insurers or title agents pursuant to this section.

381.035.  No title insurance company or title insurance agent shall willfully withhold information from, or knowingly give false or misleading information to the director, or to any title insurance rating organization, of which the title insurance company is a member or subscriber, which will affect the rates or fees chargeable pursuant to this chapter.  Each violation of this section is a class A violation as that term is defined in section 381.045.

381.038.  1.  Evidence of the examination of title and determination of insurability shall be preserved and retained by the title agent and by a title insurer with respect to its direct operations for as long as appropriate to the circumstances but, in no event less than fifteen years after the title insurance policy has been issued.

2.  Records relating to escrow and security deposits shall be preserved and retained by the title agent and by a title insurer with respect to its direct operations for as long as appropriate to the circumstances but, in no event less than five years after the escrow or security deposit account has been closed.

3.  This section shall not apply to a title insurer acting as coinsurer if one of the other coinsurers has complied with this section.

4.  Each violation of any provision of this section is a class C violation as that term is defined in section 381.045.

381.042.  1.  The director may issue rules, regulations and orders necessary to carry out the provisions of this chapter.

2.  No rule or portion of a rule promulgated pursuant to the authority of this chapter shall become effective unless it has been promulgated pursuant to the provisions of chapter 536, RSMo.

381.045.  1.  If the director determines that the title insurer or any other person has violated this chapter, or any regulation or order promulgated thereunder, after notice and opportunity to be heard, the director may order:

(1)  For each violation a monetary penalty which shall take into account the harm or potential harm to the public because of the violation and which shall not exceed:

(a)  One thousand dollars per violation for a class A violation;

(b)  Five hundred dollars per violation for a class B violation; and

(c)  One hundred dollars per violation for a class C violation; or

(2)  Revocation or suspension of the title insurer's license; or

(3)  Both monetary penalty and revocation or suspension.

2.  Nothing contained in this section shall affect the right of the director to impose any other penalties provided for in the insurance code.

3.  Nothing contained in this chapter is intended to or shall in any other manner limit or restrict the rights of policyholders, claimants and creditors.

381.048.  The director or attorney general may bring an action in a court of competent jurisdiction to enjoin violations of the Real Estate Settlement Procedures Act, 12 U.S.C. Section 2607, as amended.

381.052.  No person other than a domestic, foreign or non-U.S. title insurer organized on the stock plan and duly licensed by the director shall transact title insurance business as an insurer in this state.

381.055.  Subject to the exceptions and restrictions contained in this chapter, a title insurer shall have the power to:

(1)  Do only title insurance business;

(2)  Reinsure title insurance policies; and

(3)  Perform ancillary activities, unless prohibited by the director, including examining titles to real property and any interest in real property and procuring and furnishing related information and information about relevant personal property, when not in contemplation of, or in conjunction with, the issuance of a title insurance policy.

381.058.  1.  No insurer that transacts any class, type or kind of business other than title insurance shall be eligible for the issuance or renewal of a license to transact the business of title insurance in this state nor shall title insurance be transacted, underwritten or issued by any insurer transacting or licensed to transact any other class, type or kind of business.

2.  A title insurer shall not engage in the business of guaranteeing payment of the principal or the interest of bonds or mortgages.

3.  (1)  Notwithstanding subsection 1 of this section, and to the extent such coverage is lawful within this state, a title insurer is expressly authorized to issue closing or settlement protection to a proposed insured upon request if the title insurer issues a commitment, binder or title insurance policy.  Such closing or settlement protection shall conform to the terms of coverage and form of instrument as required by the director and may indemnify a proposed insured solely against loss of settlement funds only because of the following acts of a title insurer's named title insurance agent:

(a)  Theft of settlement funds; and

(b)  Failure to comply with written closing instructions by the proposed insured when agreed to by the title insurance agent relating to title insurance coverage;

(2)  The director may promulgate or approve a required charge for providing the coverage;

(3)  A title insurer shall not provide any other coverage which purports to indemnify against improper acts or omissions of a person with regard to escrow, settlement, or closing services.

381.062.  Before being licensed to do an insurance business in this state, a title insurer shall establish and maintain a minimum paid-in capital of not less than four hundred thousand dollars and, in addition, paid-in initial surplus of at least four hundred thousand dollars.

381.065.  1.  The net retained liability of a title insurer for a single risk in regard to property located in this state, whether assumed directly or as reinsurance, shall not exceed the aggregate of fifty percent of surplus as regards policyholders plus the statutory premium reserve less the company's investment in title plants, all as shown in the most recent annual statement of the insurer on file with the director.

2.  For purposes of this chapter:

(1)  A single risk shall be the insured amount of any title insurance policy, except that, where two or more title insurance policies are issued simultaneously covering different estates in the same real property, a single risk shall be the sum of the insured amounts of all the title insurance policies; and

(2)  A policy under which a claim payment reduces the amount of insurance under one or more other title insurance policies shall be included in computing the single risk sum only to the extent that its amount exceeds the aggregate amount of the policy or policies whose amount of insurance is reduced.

3.  The director may waive the limitation of this section for a particular risk upon application of the title insurer and for good cause shown.

381.068.  In determining the financial condition of a title insurer doing business pursuant to this chapter, the general investment provisions of sections 376.300 to 376.305, RSMo, shall apply, except that an investment in a title plant or plants in an amount equal to the actual cost shall be allowed as an admitted asset for title insurers.  The aggregate amount of the investment shall not exceed fifty percent of surplus to policyholders, as shown on the most recent annual statement of the title insurer on file with the director.

381.072.  In determining the financial condition of a title insurer doing business pursuant to this chapter, the general provisions of the insurance code requiring the establishment of reserves sufficient to cover all known and unknown liabilities including allocated and unallocated loss adjustment expense, shall apply, except that a title insurer shall establish and maintain:

(1)  (a)  A known claim reserve in an amount estimated to be sufficient to cover all unpaid losses, claims and allocated loss adjustment expenses arising under title insurance policies for which the title insurer may be liable, and for which the insurer has discovered or received notice by or on behalf of the insured or escrow or security depositor;

(b)  Upon receiving notice from or on behalf of the insured of a title defect in or 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 insurer 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;

(c)  Reserves required pursuant to this section may be revised from time to time and shall be redetermined at least once each year;

(2)  A statutory or unearned premium reserve established and maintained as follows:

(a)  A domestic title insurer shall establish and maintain an unearned premium reserve computed in accordance with this section, and all sums attributed to such reserve shall at all times and for all purposes be considered and constitute unearned portions of the original premiums.  This reserve shall be reported as a liability of the title insurer in its financial statements;

(b)  The unearned premium reserve shall be maintained by the title insurer for the protection of holders of title insurance policies.  Except as provided in this section, assets equal in value to the reserve are not subject to distribution among creditors or stockholders of the title insurer 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;

(c)  The unearned premium reserve shall consist of:

a.  The amount of the unearned premium reserve on the effective date of section A of this act; and

b.  A sum equal to fifteen cents for each one thousand dollars of net retained liability under each title insurance policy, excluding mortgagee's policies simultaneously issued with owner's policies or owner's leasehold policies of the same or greater amount, on a single risk written on properties located in this state and issued after the effective date of section A of this act;

(d)  Amounts placed in the unearned premium reserve in any year in accordance with paragraph (c) of subdivision (2) of this section shall be deducted in determining the net profit of the title insurer for that year;

(e)  A title insurer shall release from the unearned premium reserve a sum equal to ten percent of the amount added to the reserve during a calendar year on July first of each of the five years following the year in which the sum was added, and shall release from the unearned premium reserve a sum equal to three and one-third percent of the amount added to the reserve during that year on each succeeding July first until the entire amount for that year has been released.  The amount of the unearned premium reserve or similar unearned premium reserve maintained before the effective date of section A of this act shall be released in accordance with the law in effect immediately before the effective date of section A of this act;

(f)  a.  Each domestic and foreign title insurer shall file annually with the audited financial report required pursuant to section 375.1032, RSMo, an actuarial certificate made by a member in good standing of the American Academy of Actuaries, or by an actuary permitted to make such certificate by the commissioner, superintendent or director of the department of insurance of the state of incorporation of a foreign title insurer;

b.  The actuarial certification must conform to the annual statement instructions for title insurers adopted by the National Association of Insurance Commissioners and must include the actuary's professional opinion of the insurer's reserves as of the date of the annual statement.  The reserves analyzed pursuant to this section must include reserves for known claims, including adverse developments on known claims, and reserves for incurred but not reported claims;

(g)  a.  Each domestic and foreign title insurer shall establish a supplemental reserve in the amount by which the actuarially certified reserves exceed the total of the known claim reserve and statutory premium reserve as set forth in the title insurer's annual financial report, subject to subdivision (2) of this section;

b.  The supplemental reserve required pursuant to this section shall be phased in as follows:

i.  Twenty-five percent of the otherwise applicable supplemental reserve is required until December thirty-first of the year next following the effective date of section A of this act;

ii.  Fifty percent of the otherwise applicable supplemental reserve is required until December thirty-first of the second year following the effective date of section A of this act;

iii.  Seventy-five percent of the otherwise applicable supplemental reserve is required until December thirty-first section A of this act;

iv.  One hundred percent of the supplemental reserve is required after December thirty-first of the fourth year following the effective date of section A of this act.

381.075.  1.  The Missouri uniform insurers liquidation act shall apply to all title insurers subject to the title insurance act, except as otherwise provided in this section.  In applying the provisions of the Missouri uniform insurers liquidation act, the court shall consider the unique aspects of title insurance and shall have broad authority to fashion relief that provides for the maximum protection of the title insurance policyholders.

2.  Security and escrow funds held by or on behalf of the title insurer shall not become general assets and shall be administered as secured claims as defined in section 375.1152, RSMo.

3.  Title insurance policies that are in force at the time an order of liquidation is entered shall not be canceled except upon a showing to the court of good cause by the liquidator.  The determination of good cause shall be within the discretion of the court.  In making this determination, the court shall consider the unique aspects of title insurance and all other relevant circumstances.

4.  The court may set appropriate dates that potential claimants must file their claims with the liquidator.  The court may set different dates for claims based upon the title insurance policy than for all other claims.  In setting dates, the court shall consider the unique aspects of title insurance and all other relevant circumstances.

5.  As of the date of the order of insolvency or liquidation, all premiums paid, due or to become due under policies of the title insurers, shall be fully earned.  It shall be the obligation of agents, insureds or representatives of the title insurer to pay fully earned premium to the liquidator or rehabilitator.

381.078.  A title insurer shall only declare or distribute a dividend to shareholders with the prior written approval of the director, as would be permitted pursuant to subdivision (1) of subsection 1 of section 382.210, RSMo.

381.082.  1.  Without the prior written approval of the director, a domestic title insurer shall not accept:

(1)  Additional business from a title insurance agent that is not an affiliated company with the insurer if, when added to other business written through the title agent during the same calendar year, that agent's aggregate premiums written on behalf of the title insurer will exceed twenty percent of the title insurer's gross premiums written during the prior calendar year, as shown on the title insurer's most recent annual statement on file with the director; or

(2)  Additional direct operations business from a single source if, when added to other direct operations business from the single source during the same calendar year, the aggregate premiums written on the direct operations business of the single source will exceed twenty percent of the title insurer's gross premiums written during the prior calendar year as shown on the title insurers most recent annual statement on file with the director.  For purposes of this section, a "single source" means a person that refers business to the title insurer and any other person that controls, is controlled by, or is under common control with, that person.

2.  In determining whether prior approval may be given, the director shall consider:

(1)  The potential that the acceptance of more business from the title agent or source may adversely affect the financial solidity of the title insurer;

(2)  The availability of competing title agents or additional sources in the territories in which the title insurer accepts risks;

(3)  The number of years the title insurer has been in business;

(4)  Reinsurance arrangements mitigating the concentration of business from the agent or source;

(5)  The comparative profitability of the agent's or source's book of business;

(6)  The degree of oversight of the agent's operations exercised by the title insurer; and

(7)  Any other circumstances deemed by the director to be appropriate.

381.085.  1.  A title insurer or authorized rate service organization shall not deliver or issue for delivery or permit any of its authorized title insurance agents to deliver in this state, any form, in connection with title insurance written, unless it has been filed with the director and approved by the director or thirty days have elapsed and it has not been disapproved as misleading or violative of public policy.  Each violation of this subsection is a class C violation as that term is defined in section 381.045.

2.  Forms covered by this section shall include:

(1)  Title insurance policies, including standard form endorsements; and

(2)  Title insurance commitments issued prior to the issuance of a title insurance policy.

3.  After notice and opportunity to be heard are given to the insurer or rate service organization which submitted a form for approval, the director may withdraw approval of the form on finding that the use of the form is contrary to the legal requirements applicable at the time of withdrawal.  The effective date of withdrawal of approval shall not be less than ninety days after notice of withdrawal is given.

4.  Any term or condition related to an insurance coverage provided by an approved title insurance policy or any exception to the coverage, except those ascertained from a search and examination of records relating to a title or inspection or survey of a property to be insured, may only be included in the policy after the term, condition or exception has been filed with the director and approved as herein provided.

381.088.  1.  A title insurer may satisfy its obligation to file premium rates, rating manuals and forms as required by this chapter by becoming a member of, or a subscriber to, a rate service organization, organized and licensed under the provisions of this chapter, where the organization makes the filings, and by authorizing the director in writing to accept the filings on the insurer's behalf.

2.  Nothing in this chapter shall be construed as requiring any title insurer or title agent to become a member of, or a subscriber to, any rate service organization.  Nothing in this chapter shall be construed as prohibiting the filing of deviations from rate service organization filings by any member or subscriber.

381.092.  1.  Every title insurance company that shall propose its own premium rates and every title insurance rating organization shall propose premium rates that are not excessive nor inadequate for the safety and soundness of any title insurer, which do not unfairly discriminate between risks in this state which involve essentially the same exposure to loss and expense elements, and which shall give due consideration to the following matters:

(1)  The desirability for stability and responsiveness of rate structures;

(2)  The necessity of assuring the financial solvency of title insurance companies in periods of economic depression;

(3)  The necessity for paying dividends on the capital stock of title insurance companies sufficient to induce capital to be invested therein; and

(4)  A reasonable level of profit for the insurer.

2.  Every title insurance company that shall propose its own rates and every title insurance rating organization may adopt basic classifications of policies or contracts of title insurance which shall be used as the basis for rates.

381.095.  1.  If the director shall find in his review of rate filings that the filings provide for, result in, or produce rates that are not unreasonably high, and are not inadequate for the safeness and soundness of the insurer, and are not unfairly discriminatory between risks in this state involving essentially the same hazards and expense elements, the director shall approve such rates.  Prior to such approval the director may conduct a public hearing with respect to a rate filing.  An approval shall continue in effect until the director shall issue an order of disapproval pursuant to the requirements and procedure provided for in subsections 2 and 3 of this section.

2.  Upon the review at any time by the director of a rate filing, the director shall, before issuing an order of disapproval, hold a hearing upon not less than ten days' written notice, specifying in reasonable detail the matters to be considered at such hearing, to every title insurance company and title insurance rating organization which made such filing, and if, after such hearing, the director finds that such filing or a part thereof does not meet the requirements of this chapter, the director shall issue an order specifying in what respects the director finds that it so fails, and stating when, within a reasonable period thereafter, such filing or a part thereof shall be deemed no longer effective.  A title insurance company or title insurance rating organization shall have the right at any time to withdraw a filing or a part thereof, subject to the provisions of section 381.102, in the case of deviation filing.  Copies of the order shall be sent to every title insurance company and title insurance rating organization affected.  The order shall not affect any contract or policy made or issued prior to the expiration of the period set forth in the order.

3.  Any person or organization aggrieved with respect to any filing which is in effect may make written application to the director for a hearing thereon.  The title insurance company or title insurance rating organization that made the filing shall not be authorized to proceed pursuant to this subsection.  Such application shall specify in reasonable detail the grounds to be relied upon by the applicant.  If the director shall find that the application is made in good faith, that the applicant would be so aggrieved if his grounds are established, and that such grounds otherwise justify holding such a hearing, the director shall, within thirty days after receipt of such application, hold a hearing upon not less than ten days' written notice to the applicant and to every title insurance company and title insurance rating organization which made such a filing.  If, after such hearing, the director finds that the filing or a part thereof does not meet the requirements of this chapter, the director shall issue an order specifying in what respects the director finds that such filing or a part thereof fails to meet the requirements of this chapter, stating when within a reasonable period thereafter, such filing or a part thereof shall be deemed no longer effective.  Copies of such order shall be sent to the applicant and to every such title insurance company and title insurance rating organization.  The order shall not affect any contract or policy made or issued prior to the expiration of the period set forth in the order.

381.098.  1.  A corporation, an unincorporated association, a partnership or an individual, whether located within or outside this state, may make application to the director for license as a rating organization for title insurance companies, and shall file therewith:

(1)  A copy of its constitution, its articles of agreement or association or its certificate of incorporation, and of its bylaws, rules and regulations governing the conduct of its business;

(2)  A list of its members and subscribers;

(3)  The name and address of a resident of this state upon whom notices or orders of the director or process affecting such rating organization may be served; and

(4)  A statement of its qualifications as a title insurance rating organization.

2.  If the director finds that the applicant is competent, trustworthy and otherwise qualified to act as a rating organization, and that its constitution, articles of agreement or association or certificate of incorporation, and its bylaws, rules and regulations governing the conduct of its business, conform to requirements of law, the director shall issue a license authorizing the applicant to act as a rating organization for title insurance.  Licenses issued pursuant to this section shall remain in effect for three years unless sooner suspended or revoked by the director or withdrawn by the licensee.  The fee for such license shall be one thousand five hundred dollars.  Licenses issued pursuant to this section may be suspended or revoked by the director, after hearing upon notice, in the event the rating organization ceases to meet the requirements of this subsection.  Every rating organization shall notify the director promptly of every change in:

(1)  Its constitution, its articles of agreement or association or its certificate of incorporation, and its bylaws, rules and regulations governing the conduct of its business;

(2)  Its list of members and subscribers; and

(3)  The name and address of the resident of this state designated by it upon whom notices or orders of the director or process affecting such rating organization may be served.

3.  Subject to rules and regulations which have been approved by the director as reasonable, each title insurance rating organization shall permit any title insurance company not a member to be a subscriber to its rating services.  Notices of proposed changes in such rules and regulations shall be given to subscribers.  Each such rating organization shall furnish its rating services without discrimination to its members and subscribers.  The reasonableness of any rule or regulation in its application to subscribers, or the refusal of any such rating organization to admit a title insurance company as a subscriber, shall at the request of any subscriber or any such title insurance company, be reviewed by the director at a hearing held upon at least ten days' written notice to such rating organization and to such subscriber.  If the director finds that such rule or regulation is unreasonable in its application to subscribers, the director shall order that such rule or regulation shall not be applicable to subscribers.  If the rating organization fails to grant or reject an application of a title insurance company for subscribership within thirty days after it was made, the title insurance company may request a review by the director as if the application had been rejected.  If the director finds that the title insurance company has been refused admittance to the title insurance rating organization as a subscriber without justification, the director shall order such rating organization to admit the title insurance company as a subscriber.  If the director finds that the action of the title insurance rating organization was justified, the director shall make an order affirming its action.

381.102.  Every member of or subscriber to a title insurance rating organization shall adhere to the filings made on its behalf by such organization, except that any title insurance company which is a member of or subscriber to such a rating organization may file with the director a uniform percentage of decrease or increase to be applied to any or all elements of the fees produced by the rating system so filed for a class of title insurance which is found by the director to be a proper rating unit for the application of such uniform decrease or increase, or to be applied to the rates for a particular area, or otherwise deviate from the rating plans, policy forms or other matters which are the subject of filings pursuant to this chapter.  Such deviation filing shall specify the basis for the modification and shall be accompanied by the data or historical pattern upon which the applicant relies.  A copy of the deviation filing and data shall be sent simultaneously to such rating organization.  Deviation filings shall be subject to the provisions of section 381.095.

381.105.  1.  Any member of or subscriber to a title insurance rating organization may appeal to the director from any action or decision of such rating organization in approving or rejecting any proposed change in or addition to the filings of such rating organization, and the director shall, after a hearing held upon not less than ten days' written notice to the appellant and to such rating organization, issue an order approving the action or decision of such rating organization or directing it to give further consideration to such proposal and to take action or make a decision upon it within thirty days.  If such appeal is from the action or decision of the title insurance rating organization in rejecting a proposed addition to its filings, the director may, in the event the director finds that such action or decision was unreasonable, issue an order directing the rating organization to make an addition to its filings, on behalf of its members and subscribers, in a manner consistent with the director's findings, within a reasonable time after the issuance of such order.  If the appeal is from the action of the title insurance rating organization with regard to a rate or a proposed change in or addition to its filings relating to the character and extent of coverage, the director shall approve the action of the rating organization or such modification thereof as shall have been suggested by the appellant if either be made in accordance with this chapter.

2.  The failure of a title insurance rating organization to take action or make a decision within thirty days after submission to it of a proposal pursuant to this section shall constitute a rejection of such proposal within the meaning of this section.  If such appeal is based upon the failure of the rating organization to make a filing on behalf of such member or subscriber which is based on a system of expense allocation which differs from the system of expense allocation included in a filing made by such rating organization, the director shall, if the director grants the appeal, order the rating organization to make the requested filing for use by the appellant.  In deciding such appeal, the director shall apply the standards set forth in section 381.032.

381.108.  1.  The director shall promulgate reasonable rules and statistical plans, reasonably adapted to each of the rating systems on file with the department, which may be modified from time to time, and which shall be used thereafter by each title insurance company, in the recording and reporting of the composition of its business, its loss and countrywide expense experience and those of its title insurance underwriters in order that the experience of all title insurance companies may be made available, at least annually, in such form and detail as may be necessary to aid him in determining whether rating systems comply with the standards set forth in this chapter.  Such rules and plans may also provide for the recording of expense experience items which are specially applicable to this state and are not susceptible of determination by a prorating of countrywide expense experience.  In promulgating such rules and plans, the director shall give due consideration to the rating systems on file with the department, and in order that such rules and plans may be as uniform as is practicable among the several states, to the rules and to the form of the plans used for such rating systems in other states.  Such rules and plans shall not place an unreasonable burden of expense on any title insurance company.  No title insurance company shall be required to record or report its expense and loss experience on a classification basis that is inconsistent with the rating system filed by it, nor shall any title insurance company be required to report the experience to any agency of which it is not a member or subscriber.  The director may designate one or more rating organizations or other agencies to assist the director in gathering such experience and making compilations thereof, and such compilations shall be made available, subject to reasonable rules promulgated by the director, to title insurance companies and rating organizations.  The director shall give preference in such designation to entities organized by and functioning on behalf of title insurance companies operating in this state.  If the director, in his or her judgment, determines that one or more of such organizations designated as statistical agent is unable or unwilling to perform its statistical functions according to reasonable requirements established from time to time by the director, he or she may, after consultation with such statistical agent and upon twenty days' notice to any affected companies, designate another person to act on the director's behalf in the gathering of statistical experience.  The director shall in such case establish the fee to be paid to such designated person by the affected companies in order to pay the total cost of gathering and compiling such experience.  Agencies designated by the director shall assist the director in making compilations of the reported data and such compilations shall be made available, subject to reasonable rules and regulations promulgated by the director, to insurers, rating organizations and any other interested parties.

2.  Reasonable rules and plans may be promulgated by the director for the interchange of data necessary for the application of rating plans.

3.  In order to further uniform administration of rate regulatory laws, the director and every title insurance company and rating organization may exchange information and experience data with insurance supervisory officials, title insurance companies and rating organizations in other states, and may consult with them with respect to rate making and the application of rating systems.

4.  No rule or portion of a rule promulgated pursuant to the authority of this section shall become effective unless it has been promulgated pursuant to the provisions of chapter 536, RSMo.

381.112.  For purposes of the premium tax imposed by sections 148.320 and 148.340, RSMo, the premium income received by a title insurer shall mean the amount of premium actually remitted to the title insurer and shall exclude any amount of premium retained by the title agent within the definition of "premium" contained in section 381.009.

381.115.  1.  A person shall not act in the capacity of a title insurance agent and a title insurer may not contract with any person to act in the capacity of a title insurance agent with respect to risks located in this state unless the person is a licensed title insurance agent in this state.

2.  An individual employed by a licensed insurance agent to whom the agent delegates authority to act on that agent's behalf shall be either individually licensed or be named on the employing agent's license if such employee performs any of the functions of a title agent as defined in section 381.009.  Each person named on the license shall possess all qualifications determined by the director to be appropriate.  The director may adopt rules, regulations, and requirements relating to licensing and practices of persons acting in the capacity of title insurance agents.  These persons may include title insurance agents, employees of title insurance agents, and persons acting on behalf of title insurance agents.  This subsection is not intended to include persons performing clerical functions.

3.  Every title insurance agent licensed in this state shall:

(1)  Exclude or eliminate the word insurer or underwriter or similar term from its business name, unless the word agency is also included as part of the name; and

(2)  Provide, in a timely fashion, each title insurer with which it places business any information the title insurer requests in order to comply with reporting requirements of the director.

4.  A title agent licensed in this state prior to the effective date of section A of this act shall have ninety days after the effective date of section A of this Act to comply with the requirements of this section.

5.  If the title insurance agent delegates the title search to a third party, such as an abstract company, the agent must first obtain proof that the third party is operating in compliance with rules and regulations established by the director and the third party shall provide the agent and the insurer with access to and the right to copy all accounts and records maintained by the third party with respect to business placed with the title insurer.  Each violation of this subsection is a class C violation as that term is defined in section 381.045.

381.118.  1.  Each title agent licensed to sell title insurance in this state, unless exempt pursuant to subsection 8 of this section, shall successfully complete courses of study as required by this section.  Any person licensed to act as a title agent shall, during each two years, attend courses or programs of instruction or attend seminars equivalent to a minimum of eight hours of instruction.  The initial such two-year period shall begin January first of the year next following the effective date of section A of this act.

2.  Subject to approval by the director, the courses or programs of instruction which shall be deemed to meet the director's standards for continuing educational requirements shall include, but not be limited to, the following:

(1)  An insurance-related course taught by an accredited college or university or qualified instructor who has taught a course of insurance law at such institution;

(2)  A course or program of instruction or seminar developed or sponsored by any authorized insurer, recognized agents' association or insurance trade association.  A local agents' group may also be approved if the instructor receives no compensation for services;

(3)  Courses approved for continuing legal education credit by the Missouri Bar.

3.  A person teaching any approved course of instruction or lecturing at any approved seminar shall qualify for the same number of classroom hours as would be granted to a person taking and successfully completing such course, seminar or program.

4.  Excess classroom hours accumulated during any two-year period may be carried forward to the two-year period immediately following the two-year period in which the course, program or seminar was held.

5.  For good cause shown, the director may grant an extension of time during which the educational requirements imposed by this section may be completed, but such extension of time shall not exceed the period of one calendar year.  The director may grant an individual waiver of the mandatory continuing education requirement upon a showing by the licensee that it is not feasible for the licensee to satisfy the requirements prior to the renewal date.  Waivers may be granted for reasons including, but not limited to:

(1)  Serious physical injury or illness;

(2)  Active duty in the armed services for an extended period of time;

(3)  Residence outside the United States; or

(4)  Licensee is at least seventy years of age and is currently licensed as a title agent.

6.  Every person subject to the provisions of this section shall furnish in a form satisfactory to the director, written certification as to the courses, programs, or seminars of instruction taken and successfully completed by such person.  A filing fee shall be paid by the person furnishing the report as determined by the director to be necessary to cover the administrative cost related to the handling of such certification reports, subject to the limitations imposed in subsection 9 of this section.

7.  The provisions of this section shall not apply to those natural persons holding or applying for a license to act as a title agent in Missouri who reside in a state that has enacted and implemented a mandatory continuing education law or regulation pertaining to the title agents.  However, those natural persons holding or applying for a Missouri agent license who reside in states which have no mandatory continuing education law or regulations shall be subject to all the provisions of this section to the same extent as resident Missouri title agents.

8.  Rules necessary to implement and administer this section shall be promulgated by the director of the department of insurance, including, but not limited to, rules regarding the following:

(1)  The insurance advisory board established by section 375.019, RSMo, shall be utilized by the director to assist him in determining acceptable content of courses, programs and seminars to include classroom equivalency;

(2)  Every applicant seeking approval by the director of a continuing education course pursuant to this section shall pay to the director a filing fee of fifty dollars per course, except that such total fee shall not exceed two hundred fifty dollars per year for any single applicant.  Fees shall be waived for local agents' groups if the instructor receives no compensation for services.  Such fee shall accompany any application form required by the director.  Courses shall be approved for a period of no more than one year.  Applicants holding courses intended to be offered for a longer period must reapply for approval;

(3)  The director has the authority to determine the amount of the filing fee to be paid by title agents at the time of license renewal, which shall be set at an amount to produce revenue which shall not substantially exceed the cost of administering this section, but in no event shall such fee exceed ten dollars per biennial report filed.

9.  All funds received pursuant to the provisions of this section shall be transmitted by the director of the department of insurance to the department of revenue for deposit in the state treasury to the credit of the department of insurance dedicated fund.  All expenditures necessitated by this section shall be paid from funds appropriated from the department of insurance dedicated fund by the legislature.

10.  When a title agent pays his or her biennial renewal fee, such agent shall also furnish the written certification and filing fee required by this section.

11.  No rule or portion of a rule promulgated pursuant to the authority of this section shall become effective unless it has been promulgated pursuant to the provisions of chapter 536, RSMo.

381.122.  The director may during normal business hours examine, audit and inspect any and all books and records maintained by a title insurance agent pursuant to this chapter.

381.125.  1.  Whenever the business to be written constitutes affiliated business, prior to commencing the transaction, the title insurance agent shall ensure that its customer has been provided with disclosure of the existence of the affiliated business arrangement and a written estimate of the charge or range of charges generally made for the title services provided by the agent.

2.  The director may establish rules for use by all title insurance agents in the recording and reporting of the agent's owners and of the agent's ownership interests in other persons or businesses and of material transactions between the parties.

3.  The director may require each title insurance agent to file on forms prescribed by the director reports setting forth the names and addresses of those persons, if any, that have a financial interest in the agent and who the agent knows or has reason to believe are producers of title insurance business or associates of producers.

4.  Nothing in this chapter shall be construed as prohibiting affiliated business arrangements in the provision of title insurance business so long as:

(1)  The title insurance agent or party making a referral constituting affiliated business, at or prior to the time of the referral, discloses the arrangement and, in connection with the referral, provides the person being referred with a written estimate of the charge or range of charges likely to be assessed and otherwise complies with the disclosure obligations of this section;

(2)  The person being referred is not required to use a specified title insurance agent or insurer; and

(3)  The only thing of value that is received by the title insurance agent or party making the referral, other than payments otherwise permitted, is a return on an ownership interest.  For purposes of this subsection, the terms "required use" and "return on an ownership interest" shall have the meaning accorded to them under the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. Section 2607, as amended and Regulation X, 24 C.F.R. Section 3500, et seq.

5.  Each violation of any provision of this section is a class C violation as that term is defined in section 381.045.

[381.011.  1.  Sections 381.011 to 381.241 shall be known and may be cited as the "Missouri Title Insurance Act".

2.  The purpose of sections 381.011 to 381.241 is to provide the state of Missouri with a comprehensive body of law for the effective regulation and supervision of title insurance business transacted within this state in response to the McCarran-Ferguson Act, Sections 1011-1015, Title 15, United States Code.]

[381.021.  1.  Sections 381.011 to 381.241 shall apply to all persons engaged in the business of title insurance in this state.

2.  Except as otherwise expressly provided in sections 381.011 to 381.241, and except where the context otherwise requires, all provisions of the insurance laws of this state applying to insurance and insurance companies generally shall apply to title insurance and title insurance companies.  No law of this state enacted after September 28, 1987, that is inconsistent with the provisions of such sections shall be applicable to the business of title insurance unless such law specifically states that it is to be applicable to the business of title insurance.

3.  Nothing in sections 381.011 to 381.241 shall be construed to authorize the practice of law by any person who is not duly admitted to practice law in this state nor shall it be construed to authorize the director to regulate the practice of law or the sale of real estate.]

[381.031.  As used in sections 381.011 to 381.241, the following terms mean:

(1)  "Alien title insurer", any title insurer incorporated or organized under the laws of any foreign nation or any province or territory thereof;

(2)  "Applicant", a person, whether or not a prospective insured, who applies to a title insurer or title agent, or agency for a title insurance policy and who, at the time of the application, is not a title agent or agency;

(3)  "Approved attorney", an attorney at law who is not an agent or employee of a title insurer, and whose certification as to status of title a title insurer is willing to accept as the basis for issuance of its title insurance policy;

(4)  "Charge", any fee billed by a title agent, agency, or title insurer for the performance of services other than fees that fall within the definition of premium in this section.  "Charge" includes, but is not limited to, fees for document preparation, fees for the handling of escrows, settlements, or closing, and fees for services commenced but not completed.  "Charge" does not include fees collected by a title insurer, title agency, or title agent in an escrow, settlement or closing when the fees are limited to the amount billed for services rendered by an entity independent of the title insurer, title agent, or agency;

(5)  "Controlled business", any portion of a title insurer's, title agency's or title agent's business of title insurance in this state, referred to it by any producer of title business or by any associate of such producer, where the producer of title business, the associate, or both, have a financial interest in the title insurer, title agency, or title agent to which business is referred;

(6)  "Director", the director of the department of insurance;

(7)  "Domestic title insurer", a title insurer organized under the laws of this state;

(8)  "Escrow, settlement or closing fee", the consideration for supervising the actual execution, delivery or recording of transfer and lien documents and for disbursing funds;

(9)  "Financial interest", any interest, legal or beneficial, that entitles the holder directly or indirectly to one percent or more of the net profits or net worth of the entity in which the interest is held, but does not include payments of principal or interest made to a mortgage holder of the title agency;

(10)  "Foreign title insurer", any title insurer organized under the laws of any other state of the United States, the District of Columbia, or any other jurisdiction of the United States;

(11)  "Gross operating revenue", all amounts received by a title insurer, title agency, or title agent from premiums and charges;

(12)  "Net retained liability", the total liability retained by a title insurer for a single risk, after taking into account the deduction for ceded reinsured liability, if any;

(13)  "Person", any natural person, partnership, association, cooperative, corporation, trust, or other legal entity;

(14)  "Premium", risk rates charged to the insured;

(15)  "Producer of title business" or "producer", any person, including any officer, director, or owner of five percent or more of the equity or capital of any person, engaged in this state in the trade, business, occupation or profession of:

(a)  Buying or selling interests in real property;

(b)  Making loans secured by interests in real property; or

(c)  Acting as broker, agent, representative or attorney of a person who buys or sells any interest in real property or who lends or borrows money with such interest as security;

(16)  "Single risk", the insured amount of any title insurance policy, except that where two 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 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 mortgagee title insurance policy does not exceed the insured amount of the fee or leasehold title insurance policy;

(17)  "Title agent" or "title insurance agent", any authorized agent of a title insurer or representative of the title agent or agency, who acts as a title agent in the solicitation of, negotiation for, or procurement or making of any title insurance contract.  The following persons are not title agents or title insurance agents:

(a)  Approved attorneys;

(b)  Salaried officers or employees of title insurers, title agents or title insurance agencies who do not do any of the following:

a.  Establish premiums for policies of title insurance;

b.  Determine insurability; or

c.  Issue commitments, policies or other contracts of title insurance;

(18)  "Title insurance agency" or "agency", any individual transacting or doing business under any name other than his true name, any partnership, unincorporated association or corporation, transacting or doing business with the public or title insurance companies as a title insurance agent;

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

(a)  Issuing as insurer or offering to issue as insurer a title insurance policy;

(b)  Transacting or proposing to transact by a title insurer, title agency, or title agent any of the following activities when conducted or performed by a title agent, title agency, or title insurer in conjunction with the issuance of its title insurance:

a.  Soliciting or negotiating the issuance of a title insurance policy;

b.  Guaranteeing, warranting, or otherwise insuring the correctness of title searches;

c.  Handling of escrows, settlements, or closings;

d.  Execution of title insurance policies, reports, commitments, binders, and endorsements;

e.  Effecting contracts of reinsurance; or

f.  Abstracting, searching, or examining titles;

(c)  Transacting by a title insurer, title agent, or agency of matters subsequent to the issuance of a title insurance policy and arising out of it; or

(d)  Doing or proposing to do any business in substance equivalent to any of the foregoing in order to evade any provision of this act;

(20)  "Title insurance policy" or "policy", a contract insuring or indemnifying against loss or damage arising from any or all of the following:

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

(b)  Unmarketability of the insured title; or

(c)  Invalidity or unenforceability of liens or encumbrances on the stated property.

"Title insurance policy" does not include a preliminary report, binder, commitment, or abstract;

(21)  "Title insurer", a company organized under laws of this state for the purpose of transacting as insurer the business of title insurance and any foreign or alien title insurer engaged in this state in the business of title insurance as insurer;

(22)  "Title plant", an index of the records of a county which imparts constructive notice to purchasers of real property, which encompasses at least the most recent forty-five years.  The index shall be kept geographically as to those records containing a legal description of affected land, and otherwise by name of affected person.]

[381.041.  1.   No person other than a domestic, foreign, or alien title insurer organized on the stock plan and duly licensed by the director shall transact title insurance business as an insurer in this state.

2.  Each title insurer may engage in the title insurance business in this state if licensed to do so by the director and provide any other service related or incidental to the sale and transfer or financing of property.

3.  A title insurer shall maintain a minimum paid-in capital of not less than four hundred thousand dollars and, in addition, paid-in initial surplus of at least four hundred thousand dollars.]

[381.051.  1.  A title insurer, before issuing any title insurance policy covering property located in this state, shall deposit with the director of the department of insurance, hereinafter referred to as the director, a sum of four hundred thousand dollars, which shall be held for the security and protection of the holders or beneficiaries under its title insurance policies.

2.  Assets deposited pursuant to this section may, with the approval of the director, be exchanged from time to time for other assets that qualify under subsection 3 of this section.

3.  The depositing title insurer shall receive the income, interests, and dividends on any assets deposited.  The deposit required under this section may be made in legal tender or in investments now or hereafter permitted to domestic life insurers with regard to their capital, reserve and surplus.  For capital and reserve deposits, sums deposited pursuant to this section shall be valued at their market value.

4.  A title insurer that has deposited assets pursuant to this section may, with the approval of the director, withdraw any part of the assets so deposited.  If any such title insurer continues to engage in the business of title insurance, it shall not be permitted to withdraw assets that would reduce the amount of its deposits below the amount required by subsection 1 of this section.

5.  In lieu of such a deposit maintained in this state, the director shall accept a certificate or certificates in proper form of the public officer or officers having general supervision of title insurers in its state of domicile to the effect that a deposit or total deposits, in an equal or greater amount, in classes of investment authorized in such state, are being maintained for like purposes in public custody or control pursuant to the laws of such state on behalf of the title insurer.

6.  If sections 381.011 to 381.241 require a greater amount of capital and surplus or deposits than that required of a title insurer prior to September 28, 1987, such title insurer shall have three years after September 28, 1987, to comply with any such increased requirement.

7.  The provisions of sections 375.950 to 375.990, RSMo, shall apply to the impairment of capital, liquidation, and rehabilitation of title insurers.]

[381.061.  1.  The net retained liability of a title insurer for a single risk on property located in this state, whether assumed directly or as reinsurance, may not exceed fifty percent of the sum of its total surplus to policyholders and unearned premium reserve, less the admitted asset value assigned to title plants, as shown in the most recent annual statement of the title insurer on file in the office of the director.

2.  The director may waive the limitation of this section for a particular risk upon application of the title insurer and for good cause shown.]

[381.071.  1.  No title insurance policy shall be written unless and until the title insurer, title agent, or agency has:

(1)  Caused a search of title to be made from the evidence prepared from a title plant of the county where the property is located as herein defined, or if no such title plant of the county exists, or the owner of such plant refuses to furnish the title insurer, title agent, or agency desiring to insure, such title evidence at a reasonable charge and within a reasonable period of time, then such policy of title insurance shall be based upon the best title evidence available.  An attorney licensed to practice law in this state may upon personal inspection use the best evidence available in any county and is not subject to the provisions of the title plant requirement of sections 381.011 to 381.241.  The records on which the title plant is based on shall show all prior matters affecting the title to the property or interest therein for a continuous period of time of at least:

(a)  The past ten years, by two years after September 28, 1987;

(b)  The past fifteen years, by three years after September 28, 1987;

(c)  The past twenty years, by four years after September 28, 1987; and

(d)  The past twenty-seven years, by five years after September 28, 1987; and

(2)  Caused to be made a determination of insurability of title in accordance with sound underwriting practices.

2.  Except when allowed by regulations promulgated by the director, no title insurer, title agent, or agency shall knowingly issue any owner's title insurance policy or commitment to insure without showing all outstanding, enforceable recorded liens or other interests against the title which is to be insured.

3.  Evidence of the examination of title and determination of insurability shall be preserved and retained in the files of the title insurer or its title agent or agency for a period of not less than fifteen years after the title insurance policy has been issued.  Instead of retaining the original evidence, the title insurer or title agent or agency may in the regular course of business establish a system whereby all or part of the evidence is recorded, copied, or reproduced by any process that accurately and legibly reproduces or forms a durable medium for reproducing the contents of the original.

4.  This section shall not apply to:

(1)  A title insurer assuming liability through a contract of reinsurance;

(2)  A title insurer acting as coinsurer if one of the other coinsuring title insurers has complied with this section; or

(3)  Policies of title insurance issued prior to the expiration of one year after September 28, 1987.]

[381.081.  1.  A domestic title insurer shall establish and maintain an unearned premium reserve computed in accordance with this section, and all sums attributed to such reserve shall at all times and for all purposes be considered and constitute unearned portions of the original premiums.  This reserve shall be reported as a liability of the title insurer in its financial statements.

2.  The unearned premium reserve shall be maintained by the title insurer for the protection of holders of title insurance policies.  Except as provided in this section, assets equal in value to the reserve are not subject to distribution among creditors or stockholders of the title insurer 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.

3.  A foreign or alien title insurer licensed to transact title insurance business in this state shall maintain at least the same reserves on title insurance policies issued on properties located in this state as are required of domestic title insurers, unless the laws of the jurisdiction of domicile of the foreign or alien title insurer require a higher amount.

4.  The unearned premium reserve shall consist of:

(1)  The amount of the unearned premium reserve on September 28, 1987; and

(2)  A sum equal to fifteen cents for each one thousand dollars of net retained liability under each title insurance policy, excluding mortgagee's policies simultaneously issued with owner's policies or owner's leasehold policies of the same or greater amount, on a single risk written on properties located in this state and issued after September 28, 1987.

5.  Amounts placed in the unearned premium reserve in any year in accordance with subdivision (2) of subsection 4 of this section shall be deducted in determining the net profit of the title insurer for that year.

6.  A title insurer shall release from the unearned premium reserve a sum equal to ten percent of the amount added to the reserve during a calendar year on July first of each of the five years following the year in which the sum was added, and shall release from the unearned premium reserve a sum equal to three and one-third percent of the amount added to the reserve during that year on each succeeding July first until the entire amount for that year has been released.  The amount of the unearned premium reserve or similar unearned premium reserve maintained before September 28, 1987, shall be released in accordance with the law in effect immediately before September 28, 1987.]

[381.091.  1.  If a domestic title insurer becomes insolvent, is in the process of liquidation or dissolution, or is in the possession of the director:

(1)  Such amount of the assets of such title insurer equal to the unearned premium reserve then remaining may be used by or with the written approval of the director to pay for reinsurance of the liability of such title insurer upon all outstanding title insurance policies or reinsurance agreements to the extent to which claims for losses by the holders thereof are not then pending.  The balance of assets, if any, equal to the unearned premium reserve, may then be transferred to the general assets of the title insurer;

(2)  The net assets of the unearned premium reserve shall be available to pay claims for losses sustained by holders of title insurance policies then pending or arising up to the time reinsurance is effected.  If claims for losses exceed such other assets of the title insurer, such claims, when established, shall be paid pro rata out of the surplus assets attributable to the unearned premium reserve to the extent of such surplus, if any.

2.  If reinsurance is not obtained, assets equal to the unearned premium reserve and assets constituting minimum capital, or so much as remains thereof after outstanding claims have been paid, shall constitute a trust fund to be held and invested by the director for twenty years, out of which claims of policyholders shall be paid as they arise.  The balance, if any, of the trust fund shall, at the expiration of twenty years, revert to the general assets of the title insurer.]

[381.101.  1.  All title insurers licensed in this state shall establish and maintain reserves against unpaid losses and loss expenses.

2.  Upon receiving notice from or on behalf of the insured of a title defect in or 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 insurer 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.

3.  Reserves required under this section may be revised from time to time and shall be redetermined at least once each year.]

[381.111.  A title insurer may obtain reinsurance for all or any part of its liability under its title insurance policies or reinsurance agreements and may also reinsure title insurance policies issued by other title insurers on single risks located in this state or elsewhere.  Reinsurance on policies issued on properties located in this state may be obtained from any title insurers licensed to transact title insurance business in this state, any other state, or the District of Columbia and which have a combined capital and surplus of at least eight hundred thousand dollars.]

[381.121.  1.  The deposit required by section 381.051 and the capital, surplus and unearned premium reserve of domestic title insurers shall be held in either cash or investments now or hereafter permitted to domestic life insurers with regard to their capital, reserve and surplus for reserve deposit.

2.  A domestic title insurer may invest in title plants.  For purposes of determining the financial condition of such title insurer, title plants will be treated as an asset valued at actual cost to the title insurer, not to exceed fifty percent of the surplus as to policyholders as shown on the most recent annual statement of the title insurer.

3.  Any investment of a domestic title insurer acquired before September 28, 1987, and which under such sections, would be considered ineligible as an investment on that date, shall be disposed of within five years of September 28, 1987.  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.]

[381.131.  Any person who shall be appointed or who shall act as title insurance agent or agency for any title insurance company within this state, or who shall, as title insurance agent or agency, solicit applications, deliver policies and collect premiums thereon, or who shall receive or collect moneys from any source or on any account whatsoever, as agent or agency, for a title insurance company doing business in this state, shall be held responsible in a trust or fiduciary capacity to the company for any money so collected or received by him for such company.]

[381.141.  1.  No title insurer or title agent or agency shall:

(1)  Pay, directly or indirectly, to the insured or to any other person any commission, any part of its premiums, fees, or other charges; or any other consideration as inducement or compensation for the referral of title business or for performance of any escrow or other service by the title agent or agency; or

(2)  Issue any title insurance policy or perform any service in connection with any transaction in which it has paid or intends to pay any commission, rebate or inducement which it knows to be in violation of this section.

2.  Nothing in this section shall be construed as prohibiting reasonable payments, other than for the referral of title insurance business, for services actually rendered to either a title insurer or a title agent or agency in connection with title insurance business.

3.  Nothing in sections 381.011 to 381.241 shall prohibit any producer or any associate of a producer from referring title business to any title insurer or title insurance agent or agency of his, her or its choice, and if such producer or associate producer has any financial, franchise, or ownership interest in the title insurer, the title insurance agent or agency, from receiving income or profits produced or realized from such financial, franchise or ownership interest so long as the purchaser is made aware in writing of the relationship between the producer or associate producer and the title agent or agency.]

[381.151.  Nothing in sections 381.011 to 381.241 shall be construed as prohibiting the division of premiums and charges between or among a title insurer and its title agent or agency, two or more title insurers, one or more title insurers and one or more title agents or agencies or two or more title agents or agencies, provided such division of premiums and charges does not constitute:

(1)  An unlawful rebate or inducement under the provisions of sections 381.011 to 381.241; or

(2)  Payment of a forwarding fee or finder's fee.]

[381.161.  1.  No producer or other person, except the person paying the premium for the title insurance, shall require, directly or indirectly, or through any trustee, director, officer, agent, employee, or affiliate, as a condition, agreement, or understanding to selling or furnishing any other person any loan, or extension thereof, credit, sale, property, contract, lease or service, that such other person shall place, any contract of title insurance of any kind through any particular title agent, agency, or title insurer.  No title agent, agency, or title insurer shall knowingly participate in any such prohibited plan or transaction.  No person shall fix a price charged for such thing or service, or discount from or rebate upon price, on the condition, agreement, or understanding that any title insurance is to be obtained through a particular agent, agency, or title insurer.

2.  Any person who violates the provisions of this section, or any title insurer, title agent, or agency who accepts an order for title insurance knowing that it is in violation of the provision of this section shall, in addition to any other action which may be taken by the director, be subject to a fine in an amount equal to five times the premium for the title insurance.]

[381.171.  1.  Premiums shall not be inadequate, excessive or unfairly discriminatory.

2.  Premiums are excessive if, in the aggregate, they are likely to produce a long run profit that is unreasonably high in relation to the riskiness of the business or if expenses are unreasonably high in relation to the services rendered.

3.  Premiums are inadequate if they are clearly insufficient, together with investment income attributable to them, to sustain projected losses and expenses or if continued use of such premiums will have the effect of substantially lessening competition or the effect of tending to create a monopoly.

4.  Premiums are unfairly discriminatory if the premium charged for a policy of any particular face amount of liability is higher than the premium for an indentical policy within the same classification where such policy has a like face amount or a higher face amount of liability.  Premiums within each premium classification may, in the discretion of the title insurer, to a reasonable degree be less than the expenses incurred and the risks assumed in the case of policies of lower face amount of liability and the excess may be charged against policies of higher face amount of liability without rendering the premiums unfairly discriminatory.

5.  Premiums may be grouped by classifications into the various types of title policies and endorsements offered.  The classifications may be further divided to produce premiums for individual risks or services within a classification.  Those classifications or further divisions may be established based upon any one or more of the following:

(1)  The size of a transaction and its effect upon the continuing solvency of the title insurer using the rate in question if a loss should occur;

(2)  Expense elements, including management time that would ordinarily be expended in a typical transaction of a particular size;

(3)  The geographic location of a transaction, including variation in risk and expense elements attributable thereto;

(4)  The individual experience of the insurer and title insurance agent or agency using the rate in question; and

(5)  Any other reasonable considerations which may include but not be limited to builder/developer quantity discounts and multiple policy discounts on an individual parcel of property. Those classifications or further divisions thereof shall apply to all risks and services in the business of title insurance under the same or under substantially the same circumstances or conditions.

6.  In making or reviewing premiums due consideration shall be given to past and prospective loss experience, to exposure to loss, to underwriting practice and judgment, to past and prospective expenses including amounts paid to or retained by title agents or agencies, to a reasonable margin for profit and contingencies taking into account the need for a reasonable return on capital committed to the enterprise, and to all other relevant factors both within and outside of this state.

7.  The director may promulgate rules or regulations setting forth guidelines for the evaluation of premiums.  Such regulations may include consideration of:

(1)  Cost of underwriting risks assumed by the insurer;

(2)  Amounts paid to or retained by title agents;

(3)  Operating expenses of the insurer other than underwriting and claims expense;

(4)  Payment of claims and claim related expenses;

(5)  Investment income;

(6)  Reasonable profit;

(7)  Premium taxes; and

(8)  Any other factors the director deems relevant.]

[381.181.  1.  Every title insurer shall file with the director its premium schedules it proposes to use in any county of this state.  Every filing shall set forth its effective date, which shall not be earlier than the thirtieth day following its receipt by the director, and shall indicate the character and extent of the coverages and services contemplated.  Filings that the director has not disapproved within thirty days of filing shall be deemed effective.

2.  No title insurer or title agent or agency may use or collect any premium after September 28, 1987, except in accordance with the premium schedules filed with the director as required by subsections 1 and 2 of this section.  The director may provide by regulation for interim use of premium schedules in effect prior to September 28, 1987.

3.  Every title insurer shall establish basic classifications of coverages to be used as the basis for determining premiums.]

[381.191.  In order to further uniform administration of rate regulatory laws, the director and every title insurer, title agent, or agency in the state may exchange information and experience data with insurance supervisory officials of this and other states and rating organizations in other states and may consult with them with respect to such information and data.]

[381.201.  1.  No title insurer, title agent, or agency shall use any premium in the business of title insurance prior to its effective date nor prior to the filing with respect to such premium having been publicly displayed and made readily available to the public for a period of not less than thirty days in each office of the title insurer, title agent, or agency in the county to which such rates apply, and no premium increase shall apply to title policies which have been contracted for prior to such effective date.

2.  Premium charges in excess of those set forth in a premium filing which has become effective may be made when such filing includes a statement that such premiums may be made in the event unusual insurance risks are assumed or unusual services performed in the transaction of the business of title insurance, provided that such premiums are reasonably commensurate with the risks assumed for the costs of the services performed.

3.  Copies of the schedules of premiums which are required to be filed with the director under the provisions of sections 381.011 to 381.241, showing their effective date or dates, shall be kept at all times available to the public and prominently displayed in a public place in each office of a title insurer, title agent, or agency in the county to which such rates apply while such rates are effective.]

[381.211.  Every title insurer shall file with the director copies of the following forms it proposes to use in this state, including:

(1)  Title insurance polices;

(2)  Standard form endorsements; and

(3)  Preliminary reports, commitments, binders, or any other reports issued prior to the issuance of a title insurance policy.]

[381.221.  For purposes of the premium tax imposed by sections 148.320 and 148.340, RSMo, the premium income received by a title insurer shall be one hundred percent of the amounts paid by or on behalf of the insured as "premiums" within the definition of that term contained in sections 381.011 to 381.241.]

[381.231.  In addition to any other powers granted under sections 381.011 to 381.241, the director may adopt rules or regulations to protect the interests of the public including, but not limited to, regulations governing sales practices, escrow, collection, settlement, closing procedures, policy coverage standards, rebates and inducements, controlled business, the approval of agency contracts, unfair trade practices and fraud, statistical plans for data collection, consumer education, any other consumer matters, the business of title insurance, or any regulations otherwise implementing or interpreting the provisions of sections 381.011 to 381.241.  No rule or portion of a rule promulgated under the authority of this chapter shall become effective unless it has been promulgated pursuant to the provisions of section 536.024, RSMo.]

[381.241.  1.  The director of insurance or his duly authorized representative may at any time and from time to time, inspect and examine the records, books and accounts of any title insurer, and may require such periodic and special reports from any title insurer, as may be reasonably necessary to enable the director to satisfy himself that such title insurer is complying with the requirements of sections 381.011 to 381.241.  No person shall be authorized to inspect and examine the records, books and accounts of any title insurer unless such person has five years experience in the title insurance business.  It shall be the duty of the director at least once every four years to make or cause to be made an examination of every title insurer.  The reasonable expense of any examination shall be paid by the title insurer.

2.  The purpose of such examination is to enable the director to ascertain whether there is compliance with the provisions of sections 381.011 to 381.241.  If as a result of such examination the director has reason to believe that any rate, rating plan or rating system made or used by an insurer does not meet the standards and provisions of sections 381.011 to 381.241, applicable to it, the director may hold a public hearing.  Within a reasonable period of time, which shall be not less than ten days before the date of such hearing, he shall mail written notice specifying the matters to be considered at such hearing to every person, insurer or organization believed by him not to be in compliance with the provisions of sections 381.011 to 381.241.

3.  If the director, after such hearing, for good cause finds that such rate, rating plan or rating system does not meet the provisions of sections 381.011 to 381.241, he shall issue an order specifying in what respects any such rate, rating plan or rating system fails to meet such provisions, and stating when, within a reasonable period of time, the further use of such rate, rating plan or rating system by the title insurer which is the subject of the examination shall be prohibited.  A copy of such order shall be sent to such title insurer.]

[381.410.  As used in sections 381.410 and 381.412, the following terms mean:

(1)  "Cashier's check", a check, however labeled, drawn on the financial institution, which is signed only by an officer or employee of such institution, is a direct obligation of such institution, and is provided to a customer of such institution or acquired from such institution for remittance purposes;

(2)  "Certified funds", U.S. currency, funds conveyed by a cashier's check, certified check, teller's check, as defined in Federal Reserve Regulations CC, or wire transfers, including written advice from a financial institution that collected funds have been credited to the settlement agent's account;

(3)  "Director", the director of the department of insurance, unless the settlement agent's primary regulator is another division in the department of economic development.  When the settlement agent is regulated by such division, that division shall have jurisdiction over sections 381.410 and 381.412;

(4)  "Financial institution":

(a)  A person or entity doing business under the laws of this state or the United States relating to banks, trust companies, savings and loan associations, credit unions, commercial and consumer finance companies, industrial loan companies, insurance companies, small business investment corporations licensed pursuant to the Small Business Investment Act of 1958 (15 U.S.C. Section 661, et seq.), as amended, or real estate investment trusts as defined in 26 U.S.C. Section 856, as amended, or institutions constituting the Farm Credit System pursuant to the Farm Credit Act of 1971 (12 U.S.C. Section 2000, et seq.), as amended, or any person which services loans secured by liens or mortgages on real property, which person may or may not maintain a servicing portfolio for such loans; or

(b)  The following persons or entities if their principal place of business is in Missouri or a state which is contiguous to Missouri:

a.  A mortgage loan company which is subject to licensing, supervision or auditing by the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation, or the United States Veterans Administration, or the Government National Mortgage Association, or the United States Department of Housing and Urban Development, or a successor of any of the foregoing agencies or entities, as an approved seller or servicer; or

b.  A person or entity acting as a mortgage loan company pursuant to court order;

(5)  "Settlement agent", a person, corporation, partnership, or other business organization which accepts funds and documents as fiduciary for the buyer, seller or lender for the purposes of closing a sale of an interest in real estate located within the state of Missouri, and is not a financial institution, or a member in good standing of the Missouri Bar Association, or a person licensed under chapter 339, RSMo.]

[381.412.  1.  A settlement agent who accepts funds of more than ten thousand dollars, but less than two million dollars, for closing a sale of an interest in real estate shall require a buyer, seller or lender who is not a financial institution to convey such funds to the settlement agent as certified funds.  The settlement agent shall record all security instruments for such real estate closing within three business days of such closing after receipt of such certified funds.  A check:

(1)  Drawn on an escrow account of a licensed real estate broker, as regulated and described in section 339.105, RSMo;

(2)  Drawn on an escrow account of a title insurer or title insurance agency licensed to do business in Missouri;

(3)  Drawn on an agency of the United States of America, the state of Missouri or any county or municipality of the state of Missouri; or

(4)  Drawn on an account by a financial institution;

shall be exempt from the provisions of this section.

2.  No title insurer, title insurance agency or title insurance agent, as defined in section 381.031, shall make any payment, disbursement or withdrawal in excess of ten thousand dollars from an escrow account which it maintains as a depository of funds received from the public for the settlement of real estate transactions unless a corresponding deposit of funds was made to the escrow account for the benefit of the payee or payees:

(1)  At least ten days prior to such payment, disbursement or withdrawal;

(2)  Which consisted of certified funds; or

(3)  Consisted of a check made exempt from this section by the provisions of subsection 1 of this section.

3.  If the director finds that a settlement agent, title insurer, title insurance agency or title insurance agent has violated any provisions of this section, the director may assess a fine of not more than two thousand dollars for each violation, plus the costs of the investigation. Each separate transaction where certified funds are required shall constitute a separate violation.  In determining a fine, the director shall consider the extent to which the violation was a knowing and willful violation, the corrective action taken by the settlement agent to ensure that the violation will not be repeated, and the record of the settlement agent in complying with the provisions of this section.]

Section B.  The provisions of section A of this act shall become effective January 1, 2000.

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