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REFERENCE TITLE: DIFI; title companies; recorded documents |
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State of Arizona House of Representatives Fifty-sixth Legislature Second Regular Session 2024
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HB 2738 |
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Introduced by Representative Hendrix
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An Act
amending sections 20-1580 and 20-1591, Arizona Revised Statutes; relating to title insurers.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 20-1580, Arizona Revised Statutes, is amended to read:
20-1580. Title insurance agents to be licensed; responsibility; recorded documents
A. Title insurance agents shall be licensed by the director. Application for license shall be made on forms approved by the director, and the director shall issue a license upon on completion and filing the application and payment of the license fee specified in section 20-167.
B. Licenses of title insurance agents shall expire quadrennially at midnight on the last day of the same month four years after the license was issued or renewed unless sooner terminated by the withdrawal by the insurer of authority in the agent, or unless revoked by the director.
C. Title insurance agents' licenses shall be renewed quadrennially on the filing of an application containing such information as the director deems necessary.
D. The director may grant a temporary license to a corporation or limited liability company that is qualified for licensing as a title insurance agent. The license shall remain in force and effect for a period of six months. If the applicant fails to qualify for a regular title insurance agent's license as provided in this section, no a renewal or extension may not be granted.
E. title insurance agents are solely responsible for all recorded documents related to the transaction of property.
Sec. 2. Section 20-1591, Arizona Revised Statutes, is amended to read:
20-1591. Forms of policies and other contracts of title insurance; approval or disapproval; attorney fees
A. Every title insurer shall file with the director all forms of title policies and other contracts of title insurance before issuance of any policy or contract. A title insurance rating organization may make filings on behalf of all of its members or subscribers. A title insurer shall not issue any policy or contract until thirty days after the policy or contract has been filed with the director. A policy or contract is approved thirty days after filing unless the director has issued, within the thirty day thirty-day period, an order affirmatively approving or disapproving the form. On written notice given within the thirty day thirty-day period to the person making the filing, the director may extend the period for up to fifteen additional days to enable the director to complete the review of the filing.
B. Forms of title policies and other contracts of insurance, as used in this section, shall specifically exclude:
1. Reinsurance contracts or agreements. ,
2. All specific defects in title that may be ascertained from an examination of the risk and excepted in reports, binders or policies, together with any affirmative assurance of the title insurer with respect to the defects whether given by endorsement or otherwise. , and
3. Further exceptions from coverage by reason of limitations on the examination of the risk imposed by an applicant for insurance or through failure of an applicant for insurance to provide the date requisite to a judgment of insurability.
C. A title insurer may not enter into any agreement with an applicant for insurance, or with an owner or occupant of real property for which insurance has been or may be issued, to do any of the following with RESPECT to that real property:
1. Make any warranties of representations regarding the existence, EFFECTIVENESS or legal validity of any recorded document.
2. Warrant or CONFIRM the accuracy of any abstract of title as defined in section 20-1562.
3. Warrant or confirm that a preliminary report, COMMITMENT or binder is an accurate or complete listing of recorded documents affecting the real property. For the purposes of this paragraph, "preliminary report", "commitment" and "binder" have the same meanings prescribed in section 20-1562.
4. Insure, guarantee or indemnify a title insurer against loss or damage suffered by reason of recorded liens, encumbrances on, defects in or the unmarketability of the title to the real property.
5. Guarantee, warrant or otherwise insure the correctness of searches relating to the title to the real property.
D. A title insurer who violates subsection C of this section is liable for an owner's or occupant's reasonable attorney fees in any action or arbitration proceeding brought in connection with an agreement.
E. An agreement that is obtained in violation of subsection C of this section is against public policy and is void and unenforceable.