Wyo. Code R. 044-0002-3
Effective Date: 10/28/1983 to 12/31/1996
Rule Type: Superceded Rules & Regulations
Reference Number: 044.0002.3.10281983
These regulations governing the transaction of controlled business by title insurers and title agents supplement the provisions of W.S. 26-23-301, et seq. They are promulgated by the authority of and pursuant to the Wyoming Administrative Procedure Act, W.S. 16-3-101 through 16-3-115, W.S. 26-23-333 and W.S. 26-2-110.
The purpose of these regulations is to protect the interests of the insuring public by placing limitations on the writing of controlled business in the State of Wyoming.
These regulations shall apply to all title insurers and all title agents transacting the business of title insurance in the State of Wyoming.
a. "Applicant" means a person, whether or not a prospective insured, who applies to a title insurer or title agent for a title insurance policy and who, at the time of application, is not a title agent.
b. "Associate" means any:
(1) Business organized for profit in which a producer of title business is a director, officer, partner, employee or owner of five percent (5%) or more of the equity capital thereof;
(2) Employee of a producer of title business;
(3) Franchisor or franchisee of a producer of title business;
(4) Spouse, parent or child of a producer of title business who is a natural person;
(5) Person, other than a natural person, that controls, is controlled by or is under common control with a producer of title business; or
(6) Person with whom a producer of title business or any associate of such producer has any agreement, arrangement or understanding, or pursues any course of conduct, the purpose or substantial effect of which is to evade the provisions of this chapter.
c. 'Charge' means any fee billed by a title agent or title insurer or both for the performance of services, other than fees that fall within the definition of premium in paragraph 'f' of this section and includes but is not limited to fees for document preparation, fees for the handling of escrows, settlements or closings and fees for services commenced but not completed. 'Charge' does not include the fees collected by a title insurer or title agent in an escrow, settlement or closing when the fees are limited to the amount billed for services rendered by an entity independent of the title insurer or title agent;
d. 'Controlled business' means any portion of a title insurer's or title agent's business of title insurance in this state, referred to it by any producer of title business or by any associate of such producer, if the producer of title business, the associate, or both, have a financial interest in the title insurer or title agent to which business is referred;
e. 'Financial interest' means any interest that entitles the holder in any manner to five percent (5%) or more of the net profits or net worth of the entity in which the interest is held;
f. 'Premium' means fees for:
(1) Issuing a title insurance policy, including any service charge administration fee for the issuance of a title insurance policy;
(2) Abstracting, searching and examining title when conducted or performed in contemplation of or in conjunction with the issuance of a title insurance policy;
(3) Preparing or issuing preliminary reports, property profiles, commitments, binders or like products;
(4) Assuming liability under a contract of reinsurance.
g. 'Producer of title business' or 'producer' for the purpose of these regulations means any person including any officer, director or owner of five percent (5%) or more of the equity or capital of any person engaged in this state in the trade, business, occupation or profession of:
(1) Buying or selling interests in real property;
(2) Making loans secured by interests in real property; or
(3) Acting as broker, agent, representative or attorney of a person who buys or sells any interest in real property or who lends or borrows money with such interest as security.
h. 'Refer' or 'referred' means a direct or cause to be directed or to exercise any power or influence over the direction of title insurance business, whether or not the consent or approval of any other person is sought or obtained with respect to the referral.
i. 'Title insurance agent' or 'agent' means any person authorized in writing by a title insurer to do any of the following but does not include approved attorneys, officers or employees of a title insurer:
(1) Solicit title insurance business;
(2) Collect premiums;
(3) Determine insurability in accordance with underwriting rules and standards prescribed by the title insurer; or
(4) Issue policies of the title insurer.
j. 'Title insurance policy' or 'policy' means a contract wherein, subject to the stated terms and conditions, a title insurer insures.
guarantees or indemnifies owners of real or personal property or the holders of liens or encumbrances thereon or others interested therein against loss or damage suffered by reason of:
(1) Defects in, adverse claims, liens or encumbrances in the title to the stated property;
(2) Unmarketability of the title to the stated property;
(3) Guaranteeing, warranting or otherwise insuring by a title insurance company the correctness of searches relating to the title to property;
(4) Defects in the authorization, execution or delivery of an encumbrance upon such property;
(5) The insuring by a title insurance company the validity and enforceability of evidences of indebtedness secured by an encumbrance upon the title or interest in such property;
(6) The invalidity, unenforceability or loss of priority of an insured mortgage resulting from a change in rate of interest or principal balance, or both, which change is in accordance with the provisions of the insured mortgage.
k. "Title insurer" or "insurer" means a company organized under the laws of this state for the purpose of transacting as insurer the business of title insurance and any foreign or alien title insurer engaged in this state in the business of title insurance as insurer.
(Section) 5 Disclosure by producer of business
No title insurer or title insurance agent may accept any order for, issue a title insurance policy to, or provide services to, an applicant if it knows or has reason to believe that the applicant was referred to it by any producer of title business or by any associate of such producer, where the producer, the associate or both have a financial interest in the title insurer or title agent to which the business is referred unless the producer has disclosed to the buyer, or seller or lender the financial interest of the producer of title business or associate referring the title business. The disclosure must be made in writing on forms prescribed by the commissioner. The title insurer or agent shall maintain the disclosure forms for a period of three years.
(Section) 6 Forms showing financial interest to be filed with commissioner
Each title insurer and title agent shall file with the commissioner, on forms prescribed by the commissioner, reports setting forth the names and addresses of those persons, if any, who have had a financial interest in the title insurer or title agent during the calendar year, who are known or reasonably believed by the title insurer or title agent to be producers of title business or associates of producers.
a. Each title insurer shall file the report required under this subsection with its application for a license and at any time there is a change in the information provided in the last report.
b. Each title insurer or title agent licensed on the effective date of these regulations shall file the report required under this subsection within 90 days after the effective date.
(Section) 7 Restrictions upon the writing of controlled business
No title insurer or title agent may accept an order for title insurance business, issue a title insurance policy, receive or retain any premium or charge in connection with any transaction if: (i) the title insurer or title agent knows or has reason to believe that the transaction will constitute controlled business for that title insurer or title agent, and (ii) twenty-five percent (25%) or more of the gross operating revenue of that title insurer or title agent in the calendar year in which the transaction takes place is derived from controlled business.
The restrictions imposed by these regulations on the writing of controlled business shall not apply to any producer or associate who, on the effective date of these regulations, has a financial interest in any title insurer or title agent to which business is referred provided, however, that no such producer or associate is permitted to acquire any additional financial interest in any title insurer or title agency.
For purposes of Section 7 of these regulations, the percentage limitation set forth in 'ii' of Section 7 shall be fifty percent (50%) in the first calendar year after the effective date of these regulations and twenty-five percent (25%) in any later calendar year.
No license or certificate of authority may be issued, renewed or continued for a title insurer or title agent who fails to comply with these regulations.
These regulations are effective immediately upon filing with the Secretary of State.