• Consumers


  • Producers/Agents


  • Companies


Licensing of Title Insurance Agents

effective January 1, 2013

Contact: Reyn Norman, General Counsel

(___) ___-____

12/28/2012

News release

 

[Issued 12/28/12; last revised 6/17/13]

 

All individuals and business entities authorized as title insurance agents on December 31, 2012, were issued a “replacement” title insurance agent license on January 1, 2013, and were appointed to represent the same insurers authorized to represent on December 31. The replacement licenses are valid until June 30, 2013, and allow the agents to act under the same authority held under the 2001 Title Insurance law.  Any agent eligible under the 2012 Title Insurance Agent law and wishing to continue to be licensed after the replacement license expires, must apply for a new license.

 

The examination for Title Insurance Agent will be available beginning July 1, 2013. Therefore, all individuals wishing to be licensed as a Title Insurance Agent between January 1, 2013, and July 1, 2013, must apply for a Temporary Title Insurance Agent license.  If otherwise qualified, the individual will be issued a temporary title insurance agent license which will be valid from the date of issuance until September 30, 2013.  If the individual becomes qualified by taking and passing the examination prior to the expiration date, the temporary license will be automatically converted to a regular title insurance agent license and any title insurer appointments will transfer.

 

TO APPLY FOR A TEMPORARY TITLE INSURANCE AGENT LICENSE:

 

As of February 15, 2013, the on-line licensing system for Temporary Title Agents is working. 

 

PLEASE NOTE:  At a point in the process of applying for a Temporary Title Agent license, the application will ask for your Social Security number (SSN).  Here you must enter the SSN of the individual applying – not the FEIN of the firm.  The system will accept the FEIN but will not process the application.  This delays the issuance of the license.  Please make sure to only enter information specifically about the individual on the temporary license application except where it specifically asks for the business information.

 

PLEASE ALSO NOTE:  At a point in the process of applying for a Temporary Title Agent license, the application will ask for your appointing company’s FEIN or COCODE.  Here you should enter the 5-digit NAIC number of your title insurer (underwriter) in the space shown for the COCODE.  You can get this number directly from the underwriter or you can get it from aldoi.gov.  From the front page, under “Companies” click on “Company Search,” then enter the company name and click “Submit.”  The NAIC Number will be shown to the left of the company name.  This 5-digit number should be entered on the application as the “COCODE.”

 

Click here to go directly to the NIPR page to begin the on-line licensing process (or you may go to nipr.com and then under “Resident Producer” click on “Initial License”).  Unless and until you have passed the title agent examination, you will not be allowed to apply for the regular Title Agent License, so at this point you should click on “Temporary Title Agent License.”

 

Within 48 hours of completing your on-line application, conduct a licensee search on our website to see if license has been issued and if so, obtain the license number and then the Title Agent should request their title underwriter (title insurance company) to go through NIPR to appoint the title agent. Once the appointment is made, the Temporary Title license can be printed online from our website.  Here is a direct link to the Web page for our Online Services, which is where you go to print your license:  https://sbs-al.naic.org/Lion-Web/jsp/ext/login/launch.jsp

 

 

PRELICENSING COURSE:

 

To sit for the examination, a candidate must first complete a 20-hour prelicensing course on title insurance from an approved prelicensing course provider. Upon completion of the course, the candidate will receive a “Certificate of Completion” which will be required by the examination administrator to be allowed to take the examination. A “Certificate of Completion” is valid for 12 months.

 

 

PASSING THE EXAMINATION:

 

If the temporary title insurance agent license has not yet expired when the temporary licensee successfully passes the title agent examination, the temporary license will be automatically converted to a regular title agent license.

 

If the temporary title agent license has expired prior to passing the examination, the individual will have to apply for a regular title insurance agent license online at www.nipr.com.

 

REGISTER FOR THE TITLE AGENT EXAMINATION:

 

To register for the Title Agent Exam, please click here:  http://training.ua.edu/insurance-testing/insurance-testing-registration.html.  On that page, click the hyperlink that says “Click here to register or to see dates available for the State of Alabama Insurance Exam.  From there you will see a list of all the Exam sites, dates and times offered.  For the title exam, please look for dates after July 1.  After you choose a date, time, and location, scroll down until you see the Title option (almost to the bottom of list), put a check mark in the box, it will tell you the fee is $75.00, then you will need to scroll down to the bottom of the page and click to add to cart and then proceed to check out.

 

 

TO APPLY FOR A BUSINESS ENTITY TITLE AGENT LICENSE:

 

As of February 15, 2013, the on-line licensing system for Business Entity Title Insurance Agent License is not operational.  Thus, until further notice, business entities must complete the Uniform Application for Business Entity Insurance License/Registration, which can accessed online by clicking here:  http://www.nipr.com/documents/busapp.pdf.  Please download the form and print it, and complete all the applicable spaces.

 

PLEASE NOTE: On page 3 of the uniform application for business entities, on the line for Alabama (AL), place an “X” in the column for License Type “P” and then in the column on the far right for Other (O) type in “Title”.

 

Mail the completed form, any required attachments, and your check for $120 payable to “Alabama Commissioner of Insurance” to: Department of Insurance, Producer Licensing Division, PO Box 303351, Montgomery, AL 36130-3351.  If using overnight delivery service, the physical address is:  201 Monroe St, Suite 502, Montgomery AL  36104, Telephone (334) 269-3550.

 

PLEASE NOTE ALSO:  Before a business entity can be licensed under the new law, at least one individual title agent licensed under the new law will need to be identified as responsible for the business entity’s compliance with the laws, rules and regulations.  The individual can be licensed under a “temporary” title insurance agent license, but being licensed under a “replacement” license will not satisfy this requirement.

 

 

APPOINTMENTS:

 

Title insurance companies are required under the new law to “appoint” all of their agents, both individuals and business entities.  The notice of appointment fee is $30 per agent.  This notice is required to be filed with the department within 15 days of the earlier of the date the agency contract is signed or the date the first application for insurance is submitted.  This notice is to be filed electronically through NIPR; however, since NIPR was not updated to handle title insurance agents until February 15, 2013, any insurer required to file a notice of appointment prior to February 15 will be allowed 15 days after February 15 to file the notice with the department.

 

Title insurance companies can register to use NIPR now and are encouraged to contact NIPR to get set up now so they will be ready to file the notices of appointment on and after February 15.  To get the information necessary to register as a title insurance company with NIPR, a title insurer should send an electronic message to marketing@nipr.com.

 

 

PROBLEMS:

 

While we endeavor to get everything correct the first time, there have still been a few mistakes along the way.  One we have discovered is that some individuals have been issued a title insurance agent license instead of a temporary title agent license.  These individuals have not taken the prelicensing course, and they have not passed the examination.  Fortunately, the ones we detected also had an incorrect expiration date.  We are communicating directly with the individuals to let them know we will reissue a corrected license with the correct expiration date.  Please be advised that until July 1, 2013, unless you have taken the prelicensing course and passed the title agent examination (which will start being offered on July 1, 2013), you can only qualify to be issued a temporary title agent license. 

 

 

QUESTIONS:

 

RE:  Depositing checks into office trust accounts at real estate closings

 

The definition of a title insurance agent is as follows:

 

Any person who is authorized in writing by a title insurer to perform the following:

1. Solicit title insurance business.

2. Collect premiums.

3. Determine insurability in accordance with underwriting rules, standards, and guidelines prescribed by the title insurer.

4. Issue title insurance commitments, policies, or endorsements of the title insurer.

Facts:  Individual attorney is licensed as title insurance agent and appointed to represent the title insurer.  At a loan closing, the client writes a check payable to the law firm and the check is deposited into the firm’s trust account. 

 

Question:  Does this situation make it necessary for the firm to be also licensed as a title insurance agent.

 

Answer:  No.  The name on the check is not dispositive of whether that is the agent.  From the definition, it is clear an agent must first be “authorized in writing by a title insurer.”  Therefore, if the title insurer recognizes the individual attorney as the agent and only has a written agency agreement with the individual attorney, only the individual attorney needs to be licensed as the title agent, even if the check will be written to the firm and deposited into the firm account and a check written on the firm account to pay the title insurer. 

 

RE:  Closing attorney not necessarily the title agent

 

See definition of title agent above.

 

Facts:  Individual attorney handles the closing but does not write the title insurance.  Title agent delivers title commitment to closing attorney along with bill for premium.  Closing attorney collects the premium, along with other closing costs, and delivers a check to the title agent for the amount of the premium.

 

Question:  Does this situation make it necessary for the closing attorney to be licensed as a title insurance agent?

 

Answer:  No.  The intention for item (2) under the definition of title agent is for the agent to be collecting premium for the insurer.  In this situation, the closing attorney is actually collecting the premium for the agent, who will then remit the appropriate payment to the title insurer.  Since the closing attorney is not collecting premium for the title insurer, he or she is not acting as a title agent.

 

RE:    Multiple replacement licenses issued to one agent

 

Facts:  Title agent represents two or more title insurers.  For whatever reason, different identification numbers were used by the title insurers under the old law, thus under our system the agents were treated as if they were different.  For example, an individual agent representing Title Insurer A used his Social Security number as his identification number, but with Title Insurer B he used his FEIN. 

 

Question:  What should a title agent do if issued multiple replacement licenses?

 

Answer:  Please let us know if this occurs.  Title agents will only apply for one title insurance agent license and we will want to make sure all the appointments from the replacement licenses get properly transferred to the new license. 

 

RE:    Title Agent Signature

Question:  Can the title insurance agent’s “signature” on each commitment, title insurance policy, and endorsement, as required in Ala. Code Section 27-25-4(d), be provided by facsimile or stamp or must it be an actual or “wet” signature? 

Answer:  The law does not specifically impose a “wet” signature requirement, thus the title insurance agent signature required in Ala. Code Section 27-25-4(d) can be supplied by stamp or facsimile or in any other manner acceptable to the title insurance company.

 

RE:    Title Agent Name and License Number

 

Facts:  Ala. Code Section 27-25-4(d) requires the disclosure of the name and license number of the title insurance agent to be shown underneath the agent’s signature on each commitment, title insurance policy, and endorsement.

Question:  If the agent issuing the policy is a business entity, does this law require disclosure of the name and number of the business entity agent, the name and number of the individual agent signing on behalf of the business entity agent, or both?

Answer:  Both.  This question is actually answered in paragraph (1) of Rule 482-1-148-.07, which reads as follows:

All title insurance commitments, policies and endorsements issued by a title insurance agent and insuring an interest in real property situated in this state must be issued and signed by a duly licensed and appointed title insurance agent.  The signature block shall contain the license number for the issuing agent and of the signing agent.

As applied to this question, the rule requires the name and license number of the business entity agent (the issuing agent) and the name and license number of the individual agent (the signing agent) to be disclosed below the signature of the signing agent on all commitments, policies, and endorsements.  Of course, if the agent issuing the policy is an individual agent, then only the name and license number of the individual agent need be shown on the commitment, policy or endorsement.

 

RE:    Title Insurance Company, Title Insurer and Underwriter

Question:  What is the difference between the title insurance company, the title insurer, and the underwriter?

Answer:  Actually, all three of these terms are used somewhat interchangeably among the various parties involved in the title insurance business.  When used by the Alabama Department of Insurance, all three terms refer to the same entity, which is the company that is actually liable to perform under the title insurance policy. 

Ala. Code Section 27-25-3 defines “title insurer or insurer,” as those terms are used in the Alabama Title Insurance Act, as “A company organized under the laws of this state or licensed in this state for the purpose of transacting as insurer the business of title insurance, as defined in Section 27-5-10, and any foreign or alien title insurer licensed to be engaged in this state in the business of title insurance, as defined in Section 27-5-10.” 

These terms are apparently sometimes confused with terms used to refer to a title insurance agent.  Ala. Code Section 27-25-3 defines “title agent or agent,” as those terms are used in the Alabama Title Insurance Act, as follows:

          a. Any person who is authorized in writing by a title insurer to perform the following:

          1. Solicit title insurance business.

          2. Collect premiums.

          3. Determine insurability in accordance with underwriting rules, standards, and guidelines prescribed by the title insurer.

          4. Issue title insurance commitments, policies, or endorsements of the title insurer. 

          b. The term "title agent" or "agent" does not include the officers or employees of a title insurer.”

 

For additional information, please contact Michelle Driggers:  Michelle.Driggers@insurance.alabama.gov or (334) 241-4198.