Indiana Code 27-7-3-22. Closing protection letter; fee
(1) a title policy is issued by a company or title insurance producer on behalf of a company; and
Terms Used In Indiana Code 27-7-3-22
- closing protection letter: means a written indemnification of or undertaking to a party to a real estate transaction by a principal that specifies the extent to which the principal is responsible for intentional or unintentional misconduct or errors of an agent of the principal in connection with the closing of the real estate transaction. See Indiana Code 27-7-3-2
- commissioner: shall mean the insurance commissioner. See Indiana Code 27-7-3-2
- company: shall mean and include any corporation, domestic or foreign, to which this chapter is applicable. See Indiana Code 27-7-3-2
- 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.
- Property: includes personal and real property. See Indiana Code 1-1-4-5
- 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.
- title insurance: means a contract of insurance against loss or damage on account of encumbrances upon or defects in the title to real estate. See Indiana Code 27-7-3-2
- title policy: means a policy issued by a company that:
Indiana Code 27-7-3-2
the company or title insurance producer shall issue a closing protection letter to the lender, borrower, buyer, and seller of the property. A company authorized to do business under section 3 of this chapter shall charge a fee approved under subsection (e) to each party receiving the benefit of a closing protection letter.
(b) In a nonresidential real estate transaction in which:
(1) a title policy is issued by a company or title insurance producer on behalf of a company; and
(2) the company or title insurance producer will also act as a settlement or closing agent;
the company or title insurance producer may issue a closing protection letter to the lender, borrower, buyer, and seller of the property on request.
(c) A closing protection letter issued under this section must indemnify the party to which the closing protection letter is issued against any loss of settlement funds (under the terms and conditions of the closing protection letter) that results from the following acts of the company or title insurance producer that issues the closing protection letter:
(1) Theft or misappropriation of settlement funds in connection with a transaction in which the title policy is issued, only to the extent that the theft or misappropriation relates to the:
(A) status of title to; or
(B) validity, enforceability, and priority of the lien of the mortgage on;
the party’s interest in land.
(2) Failure to comply with the written closing instructions agreed to by the company or title insurance producer acting as the settlement agent, only to the extent that the failure relates to the:
(A) status of title to; or
(B) validity, enforceability, and priority of the lien of the mortgage on;
the party’s interest in land.
(d) The issuance of a closing protection letter under this section in contemplation of or in conjunction with the issuance of a title insurance policy is part of the business of title insurance for purposes of section 3 of this chapter.
(e) The amount of the fee that a company authorized to do business under section 3 of this chapter charges to each party receiving the benefits of a closing protection letter:
(1) must be submitted to and approved by the commissioner under IC 27-1-22-28; and
(2) is not subject to an agreement requiring a division of fees or premiums collected on behalf of the company.
As added by P.L.80-2013, SEC.4.