Rhode Island General Laws 27-2.6-6. Limitations on powers
(a) 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.
Terms Used In Rhode Island General Laws 27-2.6-6
- agent: means an authorized person, other than a bona fide employee of the title insurer who, on behalf of the title insurer, performs the following acts, in conjunction with the issuance of a title insurance report or policy:
(i) Determines insurability and issues title insurance reports or policies, or both, based upon the performance or review of a search or abstract of title; and
(ii) Performs one or more of the following functions:
(A) Collects or disburses premiums, escrow or security deposits or other funds;
(B) Handles escrows, settlements or closings;
(C) Solicits or negotiates title insurance business; or
(D) Records closing documents. See Rhode Island General Laws 27-2.6-3
- business of title insurance: means ":
(i) Issuing as insurer or offering to issue as insurer, a title insurance policy;
(ii) Transacting or proposing to transact by a title insurer any of the following activities when conducted or performed in contemplation of, or 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. See Rhode Island General Laws 27-2.6-3
- Commissioner: means the director of the department of business regulation, or his or her designee or the commissioner, director or superintendent of insurance in any other state. See Rhode Island General Laws 27-2.6-3
- insurer: means a company organized under laws of this state for the purpose of transacting the business of title insurance and any foreign or non-United States title insurer licensed in this state to transact the business of title insurance. See Rhode Island General Laws 27-2.6-3
- Person: means any natural person, partnership, association, cooperative, corporation, trust or other legal entity. See Rhode Island General Laws 27-2.6-3
- policy: means a contract insuring or indemnifying owners of, or other persons lawfully interested in, real or personal property or any interest in real property, against loss or damage arising from any or all of the following conditions existing and not excepted or excluded:
(i) Defects in or liens or encumbrances on the insured title;
(ii) Unmarketability of the insured title;
(iii) Invalidity, lack of priority or unenforceability of liens or encumbrances on the stated property;
(iv) Lack of legal right of access to the land; or
(v) Unenforceability of rights in title to the land. See Rhode Island General Laws 27-2.6-3
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
(b) A title insure shall not engage in the business of guaranteeing payment of the principal or the interest of bonds or mortgages.
(c)(1) Notwithstanding subsection (a) 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 or its title agent issues a preliminary report, binder, or title insurance policy. Such closing or settlement protection must be provided in connection with the issuance of any loan policy insuring a lender’s interest in residential property intended for residential occupancy containing four (4) or less units. Nothing in this section shall prohibit the title insurer from providing such closing or settlement protection in connection with the issuance of any loan policy insuring a lender’s interest in any other type of residential or commercial property. The closing or settlement protection shall conform to the terms of coverage and form of instrument as approved by the commissioner 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:
(i) Theft of settlement funds; and
(ii) 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 fee charged by a title insurer for each party receiving closing protection coverage shall be filed with, and approved by, the commissioner pursuant to §?27-2.6-16. The fee shall not be subject to any agreement requiring a division of fees or premiums collected on behalf of the title insurer. The single fee shall be for the protection of all parties receiving the benefit of closing protection, to wit: The buyer(s) or borrower(s) and the lender(s) in connection with the real property transaction giving rise to the issuance of the closing or settlement protection.
(3) A title insurer shall not provide any other coverage that purports to indemnify against improper acts or omissions of a person with regard to escrow, settlement, or closing services, except for an insured closing letter in a form approved by the department.
History of Section.
P.L. 2010, ch. 58, § 1; P.L. 2010, ch. 66, § 1; P.L. 2014, ch. 354, § 1; P.L. 2014, ch. 393, § 1.