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Title Insurance Frequently Asked Questions |
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LICENSING Ø What
does being a licensed title agent qualify me to do? The
statutory definition of a title insurance agent is: a person (either an AR resident licensee or a nonresident licensee
employed by a resident licensee) that is authorized on behalf of a title
insurer (underwriter) to issue a title insurance report or title insurance
policy. A “person” includes any
natural person, or any partnership, association, cooperative, corporation,
firm, trust, limited liability company, or other legal entity. Ø Can
I be licensed only as an issuing agent or as a signing agent? No. There is only one Arkansas Title Insurance
Agent license. The title agent license is a comprehensive license. With some exceptions, anyone who “sells,”
“solicits,” or “negotiates” insurance must be licensed as an agent. A person who only closes or only examines
title does not necessarily require a license.
A title agent license is different from the license for an abstractor;
abstractors are licensed by the Abstractor Board of Examiners. While the below chart is not specifically
tailored for title insurance, it may be helpful in determining what general
insurance producer/agent activities require a license.
Ø Where
and how do I apply for licensing? After
January 1, 2008, if you desire a title agent or agency license, you may apply
to the License Division of the Arkansas Insurance Department
(“Department”). Information can be
found online at http://www.insurance.arkansas.gov/License/forms.htm. Scroll down to Title, then follow instructions on the page. Ø What
are the basic steps in the licensing process? First,
always check the instructions provided by the Department, as information will
be updated from time to time. That
said, here are the basic steps during the licensing process:
Ø What
experience must I have to become licensed? To qualify
to sit for the exam based on experience, you must have two thousand (2000)
hours of prior title work experience.
Prior title work experience includes work such as searching,
examination, issuing commitments, preparing a policy for issuance, etc. This information must be verified by
current or former employers through submission of a notarized copy of Form
AID-LI-TA-Aff, Affidavit of Prior Title Work Experience along with the
license application. Additionally, the
Department may allow other forms of experience, such as closing or escrow
work, depending on the evidence submitted. Ø How do I get a Non-Resident
License? A
nonresident may be eligible for licensure if he/she is employed by a resident
licensee and meets the other eligibility requirements of Rule 87, Section
5. Rule 87 is available at http://www.insurance.arkansas.gov/Legal%20Dataservices/rnrpage.htm. Application for licensure must be
accompanied by a completed Affidavit of Employment by Resident Licensee. With respect to the licensed resident
employer, an individual resident licensee is one whose residence is in or who
may vote in this state. A resident
title agency licensee must show residence by establishing a physical presence
in the state, commonly referred to as “bricks and mortar,” accessible to the
public wherein the licensee principally conducts transactions, and must be an
Arkansas partnership, limited liability
partnership, corporation, or limited liability company, filed or registered
with the Arkansas Secretary of State’s Office (or in the case of an Arkansas
partnership, if required by Ark. Code Ann. § 4-70-203, filed in the office of
the county clerk of the counties in which the partnership conducts or
transacts or intends to conduct the business). Ø What happens if I fail the
exam? If you fail
the exam, you must wait thirty (30) days before you can retake the
examination. Contact Pearson Vue at
1-888-204-6259 for more instructions.
If the 30 day waiting period exceeds the 90 day valid permit period,
you must submit new applications and fees. Ø I
am an attorney. Am I required to take
the licensing examination? Yes, the
current law no longer has exemptions for attorneys; thus, attorneys must meet
the examination requirement in order to obtain a title license. Attorneys currently licensed as title
insurance agents need only meet the title agent renewal requirements,
including residency requirements, to maintain a title agent’s license. Ø I
qualify to sit for the state exam based on my experience, but need help in
preparing. What study materials are available? The Pearson
Vue website (www.pearsonvue.com/ar/insurance)
contains Content Outlines to help you prepare for the exam. There is no study book for Title Insurance, however, look to the Arkansas Title Insurance Act,
codified at Ø What if my name changes or my
address changes? Arkansas
Code Annotated § 23-64-507(f) provides that the failure to inform the
Commissioner of a change in legal name or address shall result in a penalty
pursuant to § 23-64-216. If your
name changes due to marriage, divorce, or court order, you must notify the
Department in writing and attach copies of the legal documents which reflect
the name change within 30 days of the change. If your
address or e-mail address changes you must notify the Department within 30
days by using the address change form at http://insurance.arkansas.gov/License/forms.htm. Ø I have not received any Renewal
forms, how can I renew? Title
insurance agent and agency renewal forms are available on the Department’s
website at: http://www.insurance.arkansas.gov/License/forms.htm. Ø When does my license expire? Beginning
in 2009, the expiration/renewal dates of title insurance agent licenses are
the agent’s birth date. Ø I want to license my agency, do
I have to keep my individual license?
Why do I need both? Not necessarily. You are not required to have a license
merely as the owner of the agency unless you remain actively involved or
perform the actions of a licensed agent.
However, every title agency must have a qualified or active title
insurance agent affiliated with the agency. Ø Can a title insurance agency
license remain active if there are no licensed agents affiliated with the
agency? No, the
agency license is automatically terminated if there are no licensed title
agents affiliated with the agency. The
active designee does not have to be an owner or officer of the agency. Ø Can an agent be affiliated with
more than one agency or appointed to more than one insurer at a time? Yes, there is no limit. Ø
Do I need an appointment by an insurer
in order to hold a license? Do I need
an appointment by an insurer in order for the first time license to be
issued? The answer to both questions is no.
You can hold a license without being appointed by an insurer. As long as you complete your continuing
education and renew on time, you can hold an insurance license; however, you
must be appointed by an insurer in order to write any business. Ø How can I find out if a company
is licensed? You can
view licensing information on the Department’s website. Simply go to http://www.insurance.arkansas.gov/License/divpage.htm,
scroll down to the yellow box in the lower left corner. Choose the link for the license information
you want and enter the required information.
Available license information includes companies, agencies, and
agents. Ø How do I file a complaint
against a licensee? You may
direct your written complaints to Ø Once
licensed, what do I have to do to keep my license? First, you
must be appointed by an insurer as an agent. The Arkansas Code provides that
no person acting in the capacity of a title insurance agent shall place
business with a title insurer unless a written contract exists between the
title insurer and the title insurance agent.
Those who are licensed, but not appointed, are prohibited from
transacting title insurance business (e.g., countersigning title commitments,
policies, and endorsements). In
addition, you must earn the requisite CE hours every year in order to renew
your license. Currently, you must have six CE hours per year, one hour of
which must be on the topic of Ethics. CONTINUING EDUCATION (CE) Ø
What are my CE requirements? Every title insurance agent must complete six (6) CE
hours per year, including one (1) hour of ethics. Ø
Can I get credit for being a member of a title insurance
organization? Yes, you can receive a credit for two (2) annual hours of
CE instruction if you hold an active annual membership in a local, state, or
national professional insurance organization or association. The organization or association must file
the membership roster with the Department in order for you to receive the
credit. Ø
How many hours can I carry over from one year to the next? You can
carry over the number of hours needed for the next year’s requirement; any
hours above the hours needed for the next requirement will be lost; however,
the one Ethics hour does not carry over.
Ø
Can a
Licensee become exempt from Continuing Education? No. Ø
What
courses can I take to meet my continuing education requirements? The
licensee must take a title insurance course approved by the Department and offered
by an approved continuing education provider.
You cannot use courses approved in other states but not approved in Ø
Can I get
an extension on my continuing education? If you have been unable to complete continuing education
because of ill health, medical disability or immediate family member illness,
you may request an extension for the due date of the continuing
education. You need to document the
request with medical statements from the doctor or hospital. Ø
I have completed my hours, what do I do now? Pursuant to Rule 50, the CE provider is required to file appendix H, the reporting roster of CE completion with the Department. You may request the appendix E certification of completion for your records. Title agents pay the $10.00 filing fee with the license renewal fee. Keep in mind that the CE provider has 15 days to file the attendance roster with the Department when you are scheduling your courses. Ø
What are the requirements for ethics education? You are required to complete one (1) hour of ethics education annually. The one hour is not in addition to your regular continuing education requirements, but one hour of the six hours must be an approved ethics course. Ethics hours cannot be carried over from one year to the next. Ø
What are the fines if I fail to complete my CE on time? Fines begin the first day after the due date (your
birthday). See Chart: 1
to 30 days---license will not renew and will be inactive---$25.00 31
to 60 days—license inactive and $50.00 fine 61-90
days –license inactive and $100.00 fine 91
days to 365 days—license inactive and $150.00 fine After
365 days—the license is terminated and you must start over as if you were
never licensed, including applications and license exams. If
the license is inactive due to non-compliance with continuing education, you
cannot write business until the requirements are filed and the license is
reactivated. Ø
Can I take the same course over for continuing education credit? The same course cannot be repeated within a two
(2) year period. A course
should not be repeated unless there has been a substantial change in the
course. If the course has been revised
and updated, the Department will issue a new course number for the course.
The purpose of continuing education is to educate you; repeating a course
does not meet this standard. Ø Where
can I check to see how many CE hours I have already earned? Licensee
continuing education records will be available on the Department’s website
at: http://www.insurance.arkansas.gov/License/CEProducerSearch/ProducerCESearch.asp. MINIMUM SEARCH REQUIREMENTS Ø Is there a minimum search
requirement? Yes. Every title insurance report or policy must
be based upon a search of all matters of record affecting title to the
property for at least the preceding thirty years. Even if you choose to insure certain
matters without exception based on your insurer’s underwriting standards,
those matters, if of record within the previous thirty years, must be
disclosed on the title insurance report or policy. Failure to include in the title report or
policy all matters affecting the property from at least the preceding thirty
years is a violation regardless of whether it results in a claim or loss. Ø Do I have to conduct a search
from a licensed abstract or title plant? No. Section 15 of Rule 87 provides that the
source of title evidence may include a prior title insurance policy,
abstracts of title, title plant records, county records of the ex-officio
recorder, or any combination thereof, provided that any title insurance
report derived from the search discloses “all liens, defects, and
encumbrances affecting title to the land that are filed of record.” Only a search of the immediately preceding
thirty years is required by the Arkansas Title Insurance Act and Section 15
of Rule 87. The required disclosure of
matters affecting title to the land in a title insurance report or policy is
limited to those which are filed of record within the thirty year period. Ø What happens if I don’t conduct
the minimum 30-year search? Failure to
conduct the minimum search, as required by Ark. Code Ann. § 23-103-408, is a
violation of insurance law. Under Ark.
Code Ann. § 23-64-216, the Commissioner may suspend or revoke your license,
place you on probation, or impose an administrative penalty on your license
for the violation of any insurance law, rule, or order of the Commissioner. Ø How will anyone know if I do
not conduct the minimum 30-year search? Complaints may be filed against title agents or agencies suspected of not conducting the minimum searches. All complaints received by the Department will be thoroughly investigated for violations. It is a licensee’s duty to report any known violation of the insurance code. The minimum search requirement will not only be enforced through individual title agent and agency licenses, but also through title insurers. In accordance with Ark. Code Ann. § 23-103-411 and Rule 87, the title insurer is required to conduct a yearly on-site audit of appointed title insurance agencies. The obligation is for the title insurer to either obtain or cause its agent to obtain the minimum search in order to prepare a title policy. Since the title insurer has this obligation, proof of meeting the minimum search requirements will be required during the audit. Upon learning of the violation, the Department can take action against the licensee. The Commissioner may also conduct an audit of books, records, files, and escrow and operating ac | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
