AN ACT
1-1 relating to reports of an audit by a title insurance agent or
1-2 direct operation of a title insurance company.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Article 9.39, Insurance Code, is amended to read
1-5 as follows:
1-6 Art. 9.39. ANNUAL AUDIT. (a) Every title insurance agent
1-7 and direct operation shall have an annual audit, at the agent's or
1-8 direct operation's [its or his] expense, made of trust fund
1-9 accounts, and before the 91st day after the date of [within ninety
1-10 (90) days from] the termination of its fiscal year, shall send by
1-11 certified mail, postage prepaid, to the department [Board] one copy
1-12 of such audit report with a letter of transmittal, and each such
1-13 agent, shall also send a copy of such letter of transmittal and
1-14 audit report to every title insurance company which it represents.
1-15 (b) Every title insurance company shall have an annual
1-16 audit, at its expense, made of trust fund accounts for each county
1-17 in which it operates in its own name and before the 91st day after
1-18 the date of [within ninety (90) days from] the termination of its
1-19 fiscal year shall send by certified mail, postage prepaid, to the
1-20 department [Board] one copy of such audit report.
1-21 (c) The Commissioner [Board] shall promulgate regulations
1-22 setting forth the standards of audit and the form of audit report
1-23 required.
1-24 (d) Said audit shall be made by an independent certified
2-1 public accountant or licensed public accountant, or a firm composed
2-2 of either.
2-3 (e) [Each title insurance company shall examine and analyze
2-4 the audit report furnished by each of its agents and direct
2-5 operations, and shall within three (3) months of receipt of same
2-6 report to the Board on forms to be furnished by the Board the
2-7 findings and results of its examination and analysis of such audit
2-8 report.] If a title insurance company fails to receive an audit
2-9 report from any of its agents or direct operations before the 91st
2-10 day after the date of the termination of the fiscal year of the
2-11 agent or direct operation [within the time specified above], it
2-12 shall [forthwith] report that [such] omission to the department not
2-13 later than the 30th day after the expiration of the 90-day period
2-14 [Board].
2-15 (f) All such reports [and analyses] furnished by the title
2-16 insurance company to the department [Board] shall, at the election
2-17 of the Commissioner, be classed as confidential and privileged
2-18 after having been filed with the department [Board].
2-19 (g) If any agent, direct operation, or title insurance
2-20 company shall fail or refuse to furnish an audit report within the
2-21 time required, or shall furnish an audit report which reveals any
2-22 shortage or other irregularity, or any practice not in keeping with
2-23 sound, honest business practices, the department [Board] may, after
2-24 notice to the agent, direct operation, or each title insurance
2-25 company involved and after a hearing at which the agent, direct
2-26 operation, or title insurance company may offer evidence explaining
3-1 or excusing such omissions or irregularity, revoke the license of
3-2 such agent or direct operation or revoke the certificate of
3-3 authority of such title insurance company.
3-4 (h) Any agent, direct operation, or title insurance company
3-5 feeling aggrieved by any action of the Commissioner [Board
3-6 hereunder] shall have the right to appeal under Article 1.04 of
3-7 this code [file a suit in the District Court of Travis County in
3-8 the time and manner provided in Article 9.37].
3-9 SECTION 2. This Act takes effect September 1, 1999.
3-10 SECTION 3. The importance of this legislation and the
3-11 crowded condition of the calendars in both houses create an
3-12 emergency and an imperative public necessity that the
3-13 constitutional rule requiring bills to be read on three several
3-14 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 105 passed the Senate on
March 2, 1999, by the following vote: Yeas 31, Nays 0.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 105 passed the House on
May 26, 1999, by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
_______________________________
Governor