1-1 By: Harris S.B. No. 105
1-2 (In the Senate - Filed December 17, 1998; January 28, 1999,
1-3 read first time and referred to Committee on Economic Development;
1-4 February 18, 1999, reported favorably by the following vote: Yeas
1-5 6, Nays 0; February 18, 1999, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to reports of an audit by a title insurance agent or
1-9 direct operation of a title insurance company.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Article 9.39, Insurance Code, is amended to read
1-12 as follows:
1-13 Art. 9.39. ANNUAL AUDIT. (a) Every title insurance agent
1-14 and direct operation shall have an annual audit, at the agent's or
1-15 direct operation's [its or his] expense, made of trust fund
1-16 accounts, and before the 91st day after the date of [within ninety
1-17 (90) days from] the termination of its fiscal year, shall send by
1-18 certified mail, postage prepaid, to the department [Board] one copy
1-19 of such audit report with a letter of transmittal, and each such
1-20 agent, shall also send a copy of such letter of transmittal and
1-21 audit report to every title insurance company which it represents.
1-22 (b) Every title insurance company shall have an annual
1-23 audit, at its expense, made of trust fund accounts for each county
1-24 in which it operates in its own name and before the 91st day after
1-25 the date of [within ninety (90) days from] the termination of its
1-26 fiscal year shall send by certified mail, postage prepaid, to the
1-27 department [Board] one copy of such audit report.
1-28 (c) The Commissioner [Board] shall promulgate regulations
1-29 setting forth the standards of audit and the form of audit report
1-30 required.
1-31 (d) Said audit shall be made by an independent certified
1-32 public accountant or licensed public accountant, or a firm composed
1-33 of either.
1-34 (e) [Each title insurance company shall examine and analyze
1-35 the audit report furnished by each of its agents and direct
1-36 operations, and shall within three (3) months of receipt of same
1-37 report to the Board on forms to be furnished by the Board the
1-38 findings and results of its examination and analysis of such audit
1-39 report.] If a title insurance company fails to receive an audit
1-40 report from any of its agents or direct operations before the 91st
1-41 day after the date of the termination of the fiscal year of the
1-42 agent or direct operation [within the time specified above], it
1-43 shall [forthwith] report that [such] omission to the department not
1-44 later than the 30th day after the expiration of the 90-day period
1-45 [Board].
1-46 (f) All such reports [and analyses] furnished by the title
1-47 insurance company to the department [Board] shall, at the election
1-48 of the Commissioner, be classed as confidential and privileged
1-49 after having been filed with the department [Board].
1-50 (g) If any agent, direct operation, or title insurance
1-51 company shall fail or refuse to furnish an audit report within the
1-52 time required, or shall furnish an audit report which reveals any
1-53 shortage or other irregularity, or any practice not in keeping with
1-54 sound, honest business practices, the department [Board] may, after
1-55 notice to the agent, direct operation, or each title insurance
1-56 company involved and after a hearing at which the agent, direct
1-57 operation, or title insurance company may offer evidence explaining
1-58 or excusing such omissions or irregularity, revoke the license of
1-59 such agent or direct operation or revoke the certificate of
1-60 authority of such title insurance company.
1-61 (h) Any agent, direct operation, or title insurance company
1-62 feeling aggrieved by any action of the Commissioner [Board
1-63 hereunder] shall have the right to appeal under Article 1.04 of
1-64 this code [file a suit in the District Court of Travis County in
2-1 the time and manner provided in Article 9.37].
2-2 SECTION 2. This Act takes effect September 1, 1999.
2-3 SECTION 3. The importance of this legislation and the
2-4 crowded condition of the calendars in both houses create an
2-5 emergency and an imperative public necessity that the
2-6 constitutional rule requiring bills to be read on three several
2-7 days in each house be suspended, and this rule is hereby suspended.
2-8 * * * * *