Title Insurer Liquidation Bill HB 1007 passed the Florida Senate joined with the Florida House Of Representatives jointly. It was unanimous.
This bill contains operating rules that were recommended by the Florida BAR , the FLTA and the RPPTL.
Miami- based National Title Insurance company was placed in state receivership when they financially crashed during the housing bust. The company’s reserves are running out. The current state law would require that once the money is all gone out of reserves to pay outstanding claims and admin costs that they would have to terminate their title insurance policies leaving policy holders with no title insurance.
This bill that just passed, HB 1007- changes this law. This new law states that all of the title insurance policies from National Title will stay in effect forever. But you can not create such protection when there is no money to cover the claims and costs to administer the claims. We don’t have state income tax so there is no till to get into other than documentary stamp taxes on deeds.
So the new law requires an assessment of each title insurer on a market share basis to cover the cost. The assessments aer limted. In any one year it is 3% and 10% over 5 years. These assessments will be carried out through adding it to HUD 1 Settlement statements on new policies moving forward. They are going to be a separate government assessment and NOT added into line 1101 on the HUD.
This assessment is to be collected by each closing agent and sent to the title underwriter within 60 days after closing.
We don’t know what the final amount is exactly going to be on the HUD1 Settlement statement but we will let you know as soon as we know.
Title companies are not to start collecting this fee until they are told by the state what that fee is going to be.
The bill is now on the Governor’s desk for his signature.