(1) A title insurer may issue closing or settlement protection to a buyer, borrower or lender that is a party to a transaction in which a title insurance policy will be issued. The closing or settlement protection shall be on a form filed with the department in accordance with section 41-2705, Idaho Code.
Terms Used In Idaho Code 41-2714
- Lien: A claim against real or personal property in satisfaction of a debt.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- person: includes a corporation as well as a natural person;
Idaho Code 73-114
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.
(2) The closing or settlement protection shall be limited to indemnifying the buyer, borrower or lender insured against a loss due to either or both of the following actions of a licensed and authorized title insurance agent and is deemed for the purpose of this section to be within the business of title insurance as set forth in section 41-2704, Idaho Code:
(a) Theft or misappropriation of closing or settlement funds in connection with a transaction in which a title insurance policy or title insurance policies will be issued by or on behalf of the title insurer issuing the closing or settlement protection.
(b) Failure to comply with the written closing instructions when agreed to by the title agent or title insurer, but only to the extent that the failure to follow the instructions relates to the status of the title to that interest in land or the validity, enforceability and priority of the lien of the mortgage on that interest in land.
(3) A rate must be charged and the rate charged by a title insurer for each transaction that includes closing protection coverage shall not be subject to any agreement requiring a division of rates or premiums collected on behalf of the title insurer. The issuance of a closing or settlement protection to a buyer, borrower or lender that is a party to a transaction in which a title insurance policy will be issued shall be considered to be one (1) transaction for which a single rate is charged and shall not result in a separate charge to each party. The rate shall:
(b) Be the only rate charged for closing protection; and
(c) Not exceed twenty-five dollars ($25.00).
(4) A title insurer may not provide any other protection that purports to indemnify against improper acts or omissions of a person with regard to closing or settlement services.
(5) Except as otherwise provided for in closing or settlement protection, a buyer, borrower, lender, or title insurer retains all their respective rights and remedies in connection with losses suffered due to theft or misappropriation of closing or settlement funds or the failure to comply with written closing instructions. Nothing in this section shall be construed to require a buyer, borrower or lender to obtain closing or settlement protection. A failure to obtain closing or settlement protection shall not be construed as an error, omission or other breach of duty of a buyer, borrower or lender.