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10
31A-23a-1001
31A-23a-1003
0
Real Estate Modifications
2026 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Anthony E. Loubet
Senate Sponsor:
LONG TITLE
General Description:
This bill modifies affiliated business arrangements in title insurance.
Highlighted Provisions:
This bill:
modifies the definition of "affiliated business";
provides a framework for RESPA compliance based on revenue concentration; and
makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
31A-23a-1001
, as last amended by Laws of Utah 2020, Chapter 448
31A-23a-1003
, as last amended by Laws of Utah 2020, Chapter 448
Be it enacted by the Legislature of the state of Utah:
Section 1. Section
31A-23a-1001
is amended to read:
31A-23a-1001
. Definitions.
As used in this part:
(1)
"Affiliated business" means the gross
transaction
title premium
revenue of a title
entity's title insurance business in the state that is the result of an affiliated business
arrangement.
(2)
"Affiliated business arrangement" means the same as that term is defined in 12 U.S.C.
Sec. 2602, except the services that are the subject of the arrangement do not need to
involve a federally related mortgage loan.
(3)
"Applicable percentage" means:
(a)
on February 1, 2020, through January 31, 2021, 0.5%;
(b)
on February 1, 2021, through January 31, 2022, 1%;
(c)
on February 1, 2022, through January 31, 2023, 1.5%;
(d)
on February 1, 2023, through January 31, 2024, 2%;
(e)
on February 1, 2024, through January 31, 2025, 2.5%;
(f)
on February 1, 2025, through January 31, 2026, 3%;
(g)
on February 1, 2026, through January 31, 2027, 3.5%;
(h)
on February 1, 2027, through January 31, 2028, 4%; and
(i)
on February 1, 2028, through January 31, 2029, 4.5%.
(4)
"Associate" means the same as that term is defined in 12 U.S.C. Sec. 2602.
(5)
"Division" means the Division of Real Estate created in Section
61-2-201
.
(6)
"Essential function" means:
(a)
examining and evaluating, based on relevant law and title insurance underwriting
principles and guidelines, title evidence to determine the insurability of a title and
which items to include or exclude in a title commitment or title insurance policy to be
issued;
(b)
preparing and issuing a title commitment or other document that:
(i)
discloses the status of the title as the title is proposed to be insured;
(ii)
identifies the conditions that must be met before a title insurance policy will be
issued; and
(iii)
obligates the insurer to issue a title insurance policy if the conditions described in
Subsection
(6)(b)(ii)
are met;
(c)
clearing underwriting objections and taking the necessary steps to satisfy any
conditions to the issuance of a title insurance policy;
(d)
preparing the issuance of a title insurance policy; or
(e)
handling the closing or settlement of a real estate transaction when:
(i)
it is customary for a title entity to handle the closing or settlement; and
(ii)
the title entity's compensation for handling the closing or settlement is
customarily part of the payment or retention from the insurer.
(7)
"New or newly affiliated title entity" means a title entity that:
(a)
is licensed as a title entity for the first time on or after May 14, 2019; or
(b)
(i)
is licensed as a title entity before May 14, 2019; and
(ii)
enters into an affiliated business arrangement for the first time on or after May
14, 2019.
(8)
"Producer" means the same as the term "person who is in a position to refer settlement
service business" is defined in 12 C.F.R. Sec. 1024.15(c).
(9)
"RESPA" means the federal Real Estate Settlement Procedures Act, 12 U.S.C. Sec.
2601 et seq. and any rules made thereunder.
(10)
"Section 8 of RESPA" means 12 U.S.C. Sec. 2607 and any rules promulgated
thereunder.
(11)
"Sufficient capital and net worth" means:
(a)
for a new or newly affiliated title entity:
(i)
$100,000 for the first five years after becoming a new or newly affiliated title
entity; or
(ii)
after the first five years after becoming a new or newly affiliated title entity, the
greater of:
(A)
$50,000; or
(B)
on February 1 of each year, an amount equal to 5% of the title entity's average
annual gross revenue over the preceding two calendar years, up to $150,000; or
(b)
for a title entity licensed before May 14, 2019, who is not a new or newly affiliated
title entity:
(i)
for the time period beginning on February 1, 2020, and ending on January 31,
2029, the lesser of:
(A)
an amount equal to the applicable percentage of the title entity's average
annual gross revenue over the two calendar years immediately preceding the
February 1 on which the applicable percentage first applies; or
(B)
$150,000; and
(ii)
beginning on February 1, 2029, the greater of:
(A)
$50,000; or
(B)
an amount equal to 5% of the title entity's average annual gross revenue over
the preceding two calendar years, up to $150,000.
(12)
"Title entity" means:
(a)
a title licensee as defined in Section
31A-2-402
; or
(b)
a title insurer as defined in Section
31A-23a-415
.
(13)
(a)
"Title evidence" means a written or electronic document that identifies and
describes or compiles the documents, records, judgments, liens, and other
information from the public records relevant to the history and current condition of a
title to be insured.
(b)
"Title evidence" does not include a pro forma commitment.
Section 2. Section
31A-23a-1003
is amended to read:
31A-23a-1003
. Affiliated business arrangements.
(1)
An affiliated business arrangement between a person and a title entity violates Section 8
of RESPA for purposes of state law if:
(a)
the title entity does not have sufficient capital and net worth in a reserve account in
the title entity's name; or
the title entity lacks sufficient capital and net worth
maintained in a reserve account in the title entity's name; or
(b)
70% or more of the title entity's annual title premiums are derived from affiliated
business, excluding title premiums calculated using filed centralized rates from a title
insurance underwriter.
(b)
more than 70% of the title entity's annual title insurance business is affiliated
business on or after the later of:
(i)
two years after the title entity begins an affiliated business arrangement; or
(ii)
June 1, 2021.
(2)
In addition to Subsection
(1)
, the division may find that an affiliated business
arrangement between a person and a title entity violates Section 8 of RESPA after
evaluating and weighing the following factors in light of the specific facts before the
division:
(a)
whether the title entity:
(i)
is staffed with the title entity's own employees to conduct title insurance business;
(ii)
manages the title entity's own business affairs;
(iii)
has a physical office for business that is separate from any producer's or
associate's office and pays market rent;
(iv)
provides the essential functions of title insurance business for a fee, including
incurring the risks and receiving the rewards of any comparable title entity; and
(v)
performs the essential functions of title insurance business itself;
(b)
if the title entity contracts with another person to perform a portion of the title
entity's title insurance business, whether the contract:
(i)
is with an independent third party; and
(ii)
provides payment for the services that bears a reasonable relationship to the value
of the services or goods received; and
(c)
whether the person from whom the title entity receives referrals under the affiliated
business arrangement also sends title insurance business to other title entities.
Section 3.
Effective Date.
This bill takes effect on
May 6, 2026
.
2-17-26 8:57 AM