By Counts H.B. No. 766
Substitute the following for H.B. No. 766:
By Counts C.S.H.B. No. 766
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of title insurance.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Article 9.30, Insurance Code, is amended by
1-5 amending Section B and adding a new Section F to read as follows:
1-6 Art. 9.30. Rebates and Discounts. A. No commission,
1-7 rebate, discount, portion of any title insurance premium, or any
1-8 other thing of value shall be directly or indirectly paid, allowed
1-9 or permitted by any person doing the business of title insurance or
1-10 received or accepted by any person for doing the business of title
1-11 insurance or for soliciting or referring title insurance business.
1-12 B. This Article shall <may> not, however, be construed as
1-13 prohibiting:
1-14 (1) a foreign or domestic title insurance company
1-15 doing business in this state pursuant to <under> this Chapter, from
1-16 appointing pursuant to this Chapter as its title insurance agent
1-17 <pursuant to this Chapter> a person owning or leasing and operating
1-18 an abstract plant of such county and making an <the> arrangement
1-19 for division of premiums with the agent as shall be set by the
1-20 Board;
1-21 (2) payments for services actually performed by a
1-22 title insurance company, a title insurance agent, or a direct
1-23 operation, in connection with: (i) closing the transaction as
1-24 defined in Article 9.02(n), or (ii) furnishing examined title
2-1 evidence, but such<, furnishing of title evidence, or title
2-2 examination, which> payment shall be <may not exceed> the
2-3 percentages of the premium as follows: <or amounts established by
2-4 the Board for those payments; or>
2-5 (a) For policies of title insurance issued on
2-6 property located in a county having a population of 50,000 or less
2-7 according to the latest federal decennial census, payment for: (i)
2-8 examined title evidence shall be 70% of the agent's retained
2-9 premium, and (ii) closing the transaction shall be 30% of the
2-10 agent's retained premium; and
2-11 (b) For policies of title insurance issued on
2-12 property located in a county having a population of more than
2-13 50,000 according to the latest federal decennial census, payment
2-14 for closing the transaction, furnishing title evidence or
2-15 furnishing examined title evidence shall not exceed the percentages
2-16 of the premium or amounts established by the commissioner for those
2-17 payments.
2-18 (3) payment of bona fide compensation to a bona fide
2-19 employee principally employed by a title insurance company, direct
2-20 operation, title insurance agent, or other reasonable payment for
2-21 goods or facilities actually furnished and received; or
2-22 (4) payments for services actually performed by an
2-23 attorney in connection with title examination or closing a
2-24 transaction, which payment may not exceed a reasonable charge for
2-25 such services.
2-26 <(5) Nothing in this Article shall affect the division
2-27 of premium between a title insurance company and its subsidiary
3-1 title insurance agent when the title insurance company directly
3-2 issues its policy or contract of title insurance pursuant to
3-3 Article 9.34. For purposes of this provision, a subsidiary is a
3-4 company at least 50 percent of the voting stock of which is owned
3-5 by the title insurance company or by a wholly owned subsidiary of
3-6 the title insurance company.>
3-7 C. A person receiving any form of compensation under Section
3-8 B(2) of this Article must be licensed as provided for under this
3-9 Chapter.
3-10 D. The payment or receipt of a commission, rebate, discount,
3-11 or other thing of value to or by any person for soliciting or
3-12 referring title insurance business in violation of this Article is
3-13 engaging in the unauthorized business of insurance, and in addition
3-14 to any other penalty, after notice and opportunity for hearing, is
3-15 subject to a monetary forfeiture not less than the value nor more
3-16 than three times the value of the commission, rebate, discount, or
3-17 other thing of value.
3-18 E. No person shall give and no person shall accept any
3-19 portion, split, or percentage of any charge made or received for
3-20 the rendering of a real estate settlement or closing in connection
3-21 with a transaction involving the conveyance or mortgaging of real
3-22 estate located in the State of Texas other than for services
3-23 actually performed.
3-24 F. Nothing in this Article shall affect the division of
3-25 premium between a title insurance company and its subsidiary title
3-26 insurance agent when the title insurance company directly issues
3-27 its policy or contract of title insurance pursuant to Article 9.34.
4-1 For purposes of this provision, a subsidiary is a company at least
4-2 50 percent of the voting stock of which is owned by the title
4-3 insurance company or by a wholly owned subsidiary of the title
4-4 insurance company.
4-5 SECTION 2. This Act takes effect September 1, 1995, and
4-6 applies to a policy or contract of title insurance that is
4-7 delivered, issued for delivery, or renewed on or after January 1,
4-8 1996. A policy or contract delivered, issued for delivery, or
4-9 renewed before January 1, 1996, is governed by the law that existed
4-10 immediately before the effective date of this Act, and that law is
4-11 continued in effect for that purpose.
4-12 SECTION 3. The importance of this legislation and the
4-13 crowded condition of the calendars in both houses create an
4-14 emergency and an imperative public necessity that the
4-15 constitutional rule requiring bills to be read on three several
4-16 days in each house be suspended, and this rule is hereby suspended.