14VAC5-395 Rules Governing Settlement Agents

REGULATIONS

Vol. 26 Iss. 7 - December 07, 2009

TITLE 14. INSURANCE

STATE CORPORATION COMMISSION

Chapter 395

Proposed Regulation

REGISTRAR'S NOTICE: The State Corporation Commission is exempt from the Administrative Process Act in accordance with § 2.2-4002 A 2 of the Code of Virginia, which exempts courts, any agency of the Supreme Court, and any agency that by the Constitution is expressly granted any of the powers of a court of record.

Title of Regulation: 14VAC5-395. Rules Governing Settlement Agents (amending 14VAC5-395-30, 14VAC5-395-40).

Statutory Authority: §§ 6.1-2.25 and 12.1-13 of the Code of Virginia.

Public Hearing Information: A public hearing will be held upon request.

Public Comment Deadline: December 21, 2009.

Agency Contact: Scott White, Senior Counsel, Office of General Counsel, State Corporation Commission, 1300 East Main Street, P.O. Box 1197, Richmond, VA 23218, telephone [phone], FAX [phone], or email [e-mail].

Summary:

The amendments incorporate statutory changes made to § 6.1-2.26 of the Code of Virginia that shift the duty to register settlement agents from the Virginia State Bar to the appropriate licensing authority. The proposed amendments incorporate these statutory changes by making the Bureau of Insurance responsible for registering title insurance agents and title insurance companies that conduct settlements.

AT RICHMOND, NOVEMBER 12, 2009

COMMONWEALTH OF VIRGINIA

At the relation of the

STATE CORPORATION COMMISSION

CASE NO. INS-2009-00249

Ex Parte: In the matter of Adopting
Amendments to the Rules Governing
Settlement Agents

ORDER TO TAKE NOTICE

Section 12.1-13 of the Code of Virginia provides that the State Corporation Commission ("Commission") shall have the power to promulgate rules and regulations in the enforcement and administration of all laws within its jurisdiction. Section 6.1-2.25 of the Code of Virginia provides that the Commission may issue any rules and regulations necessary or appropriate for the administration and enforcement of Title 6.1 of the Code of Virginia. The regulations issued by the Commission pursuant to § 6.1-2.25 of the Code of Virginia are set forth in Title 14 of the Virginia Administrative Code.

The Bureau of Insurance has submitted to the Commission a request to amend the rules set forth in Chapter 395 of Title 14 of the Virginia Administrative Code, entitled "Rules Governing Settlement Agents." The proposed amendments to 14 VAC 5-395-30 and 14 VAC 5-395-40 are necessary because of changes by the General Assembly to § 6.1‑2.26 of the Code of Virginia that shift the duty to register settlement agents from the Virginia State Bar to the appropriate licensing authority. The proposed amendments incorporate these statutory changes by making the Bureau of Insurance responsible for registering title insurance agents and title insurance companies that conduct settlements.

The Commission is of the opinion that the proposed amendments submitted by the Bureau of Insurance should be considered for adoption with an effective date of January 10, 2010.

Accordingly, IT IS ORDERED THAT:

(1) The proposed regulation entitled "Rules Governing Settlement Agents," which amends 14 VAC 5‑395-30 and 14 VAC 5-395-40, be attached hereto and made a part hereof.

(2) All interested persons who desire to comment or request a hearing on the proposed regulation shall file such comments or hearing request on or before December 21, 2009, in writing with Joel H. Peck, Clerk, State Corporation Commission, c/o Document Control Center, 1300 East Main Street, 1st Floor, Richmond, Virginia 23219 and shall refer to Case No. INS-2009-00249. Requests for a hearing shall state why a hearing is necessary and why the issues cannot be adequately addressed in written comments. Interested persons desiring to submit comments electronically may do so by following the instructions available at the Commission's website: http://www.scc.virginia.gov/case.

(3) If no written request for a hearing on the proposed regulation is filed on or before December 21, 2009, the Commission, upon consideration of any comments submitted in support of or in opposition to the proposed regulation, may adopt the proposed regulation as submitted by the Bureau of Insurance.

(4) The Commission's Division of Information Resources shall cause a copy of this Order, together with the proposed regulation, to be forwarded to the Virginia Registrar of the Regulations for appropriate publication in the Virginia Register of Regulations and shall make this Order and the attached proposed regulation available on the Commission's website, http://www.scc.virginia.gov/case.

(5) AN ATTESTED COPY hereof, together with a copy of the proposed regulation, shall be sent by the Clerk of the Commission to the Bureau of Insurance in care of Deputy Commissioner Brian P. Gaudiose, who shall mail a copy of this Order, together with the proposed regulation, to all licensed title insurance companies and other interested parties designated by the Bureau.

(6) The Bureau of Insurance shall file with the Clerk of the Commission an affidavit of compliance with the notice requirements of paragraph (5) above.

14VAC5-395-30. Registration.

Every title insurance agent, title insurance agency and title insurance company that acts as a settlement agent shall be required to be registered with the Virginia State Bar bureau in accordance with the provisions of § 6.1-2.26 of the Code of Virginia.

14VAC5-395-40. Insurance and bonding requirements.

A. At the time of registration with the Virginia State Bar, every title insurance agent and title insurance agency acting as a settlement agent shall file with the bureau a certification on a form prescribed by the bureau, that the settlement agent has, and thereafter shall keep in force for as long as they are acting as a settlement agent, the following:

1. An errors and omissions insurance policy providing limits of at least $250,000 per occurrence or per claim and issued by an insurer authorized to do business in the Commonwealth of Virginia.

2. A blanket fidelity bond or employee dishonesty insurance policy providing limits of at least $100,000 per occurrence or per claim and issued by an insurer authorized to do business in the Commonwealth of Virginia. Settlement agents that have no employees except the owners, partners, shareholders, or members may request a waiver of this requirement on their certification form.

B. Every title insurance agent and title insurance agency that acts as a settlement agent in the Commonwealth of Virginia or is registered with the Virginia State Bar shall file with the bureau a an original surety bond in an amount not less than $200,000 on a form prescribed by the bureau. The original surety bond shall be filed with the bureau at the time of registration with the Virginia State Bar and, if such bond is canceled, at the time a replacement bond is issued.

DOCUMENTS INCORPORATED BY REFERENCE

Statement on Auditing Standards, Special Reports, July 1, 1989, American Institute of Certified Public Accountants.

Securities Act Regulations (SEC970016).

VA.R. Doc. No. R10-2219; Filed November 16, 2009, 10:05 a.m.