SENATE BILL REPORT

SB 6589

BYSenators von Reichbauer, Moore and Johnson

Changing provisions relating to which county a title insurer may do business.

Senate Committee on Financial Institutions & Insurance

Senate Hearing Date(s):January 23, 1990

Majority Report:     That Substitute Senate Bill No. 6589 be substituted therefor, and the substitute bill do pass.

     Signed by Senators von Reichbauer, Chairman; Johnson, Vice Chairman; McMullen, Rasmussen, Smitherman, West.

Senate Staff:Benson Porter (786-7470)

                January 25, 1990

AS REPORTED BY COMMITTEE ON FINANCIAL INSTITUTIONS & INSURANCE, JANUARY 23, 1990

BACKGROUND:

Currently, a title insurer can obtain a certificate of authority from the Insurance Commissioner if certain statutory criteria are met.  These criteria include a requirement that a title insurer must own and maintain a complete set of tract indexes of the county in which its principal office in Washington is located.  In addition, a title insurer must maintain a proscribed deposit in a guaranty fund.

A title insurer may do business in two or more counties if certain guaranty fund deposit requirements are maintained.  Moreover, the title insurer must own and maintain, or have a duly authorized agent that owns and maintains, a complete set of tract indexes for the additional counties where the insurer transacts business.

SUMMARY:

A title insurer may transact business in a county where the insurer purchases a title policy from another title insurer authorized to transact business in that county.  The purchasing title insurer shall purchase the full amount of insurance to be ultimately insured under the title policy.

EFFECT OF PROPOSED SUBSTITUTE:

The purchasing title insurer must pay the full charge for the policy and must charge the same amount to its own customer.  The purchasing title insurer may combine the purchased insurance in a single policy that insures the title of one or more other pieces of property.

A title insurer purchasing a policy under this section is required to notify its customer of this transaction.

Appropriation:  none

Revenue:   none

Fiscal Note:    none requested

Senate Committee - Testified:   John Woodring, Warren Olson, Washington Land Title Association (pro); Scott Jarvis, Insurance Department