Missouri Revised Statutes

Chapter 381
Title Insurance Law

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Citation of law--purpose statement.

381.011. 1. Sections 381.011 to 381.412 shall be known and may be cited as the "Missouri Title Insurance Act".

2. The purpose of sections 381.011 to 381.405 is to provide the state of Missouri with a comprehensive body of law for the effective regulation and supervision of title insurance business transacted within this state in response to the McCarran-Ferguson Act, Sections 1011-1015, Title 15, United States Code.

3. Except as otherwise expressly provided in this chapter and except where the context otherwise requires, all provisions of the laws of this state relating to insurance and insurance companies generally shall apply to title insurance, title insurers, and title agents.

(L. 1987 S.B. 251 § 1, Repealed L. 2000 S.B. 894 § D, L. 2007 S.B. 66)

Effective 1-01-08

Title insurance commitment, required statement, when--lender'sinsurance policy without owner's title insurance, notice givenwhen, contents, retention--penalty for violation.

381.015. 1. As used in sections 381.011 to 381.412, the term "title insurance commitment" or "commitment" means a preliminary report, commitment, or binder issued prior to the issuance of a title insurance policy containing the terms, conditions, exceptions, and other matters incorporated by reference under which the title insurer is willing to issue its title insurance policy. A title insurance commitment is not an abstract of title.

2. A title insurer, title agency, or title agent issuing a lender's title insurance policy in conjunction with a mortgage loan made simultaneously with the purchase of all or part of the real estate securing the loan, where no owner's title insurance policy has been requested, shall give written notice, on a form prescribed or approved by the director, to the purchaser-mortgagor at the time the commitment is prepared. The notice shall explain that a lender's title insurance policy is to be issued protecting the mortgage-lender, and that the policy does not provide title insurance protection to the purchaser-mortgagor as the owner of the property being purchased. The notice shall explain that the purchaser-mortgagor may obtain an owner's title insurance policy protecting the property owner, within sixty days of closing and at a specified cost or approximate cost, if the proposed coverages are or amount of insurance is not then known. A copy of the notice, signed by the purchaser-mortgagor, shall be retained in the relevant underwriting file at least fifteen years after the effective date of the policy.

3. A violation of any provision under this section is a level one violation under section 374.049.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

Written contract with title insurer required for commitment or policyissuance, statement of financial condition when, contents, reviewand notification requirements, inventory, proof of licensure,penalty for violation.

381.018. 1. The title insurer shall not allow the issuance of its commitments or policies by a title agency or title agent not affiliated with a title agency unless there is in force a written contract between the parties.

2. The title insurer shall maintain an inventory of all policy numbers allocated to each title agency or title agent not affiliated with a title agency.

3. The title insurer shall have on file proof that the title agency or title agent is licensed by this state at the time a written contract is entered into or before it becomes effective.

4. The title insurer shall establish the underwriting guidelines and, where applicable, limitations on title claims settlement authority to be incorporated into contracts with its title agencies and title agents not affiliated with a title agency.

5. If a title insurer terminates its contract with a title agency licensed under this chapter, the insurer shall, within seven days of the termination, notify the director of the reasons for termination, including any information that is required to be reported under subsection 5 of section 375.022.

6. A violation of any provision under this section is a level two violation under section 374.049.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

Required disclosures.

381.019. 1. A title insurer, title agency or title agent participating in a settlement or closing of a residential real estate transaction shall provide clear, conspicuous, and distinct disclosure of premiums and charges. The director shall adopt rules not in conflict with provisions of the federal Real Estate Settlement Procedures Act, as amended, under section 381.042 to implement disclosure of the following:

(1) Premium;

(2) Abstract or title search and examination fee and any other associated charges or fees; and

(3) Settlement, escrow, or closing fees.

2. A violation of any provision under this section is a level two violation under section 374.049.

(L. 2007 S.B. 66)

Effective 1-01-08

Title insurer, agency or agent not affiliated with a title agency mayoperate as an escrow, security, settlement or closing agent,when, penalty for violations.

381.022. 1. As used in sections 381.011 to 381.412, the following terms mean:

(1) "Escrow", written instruments, money or other items deposited by one party with a depository, escrow agent, or escrowee for delivery to another party upon the performance of a specified condition or the happening of a certain event;

(2) "Qualified depository institution", an institution that is:

(a) Organized or, in the case of a United States branch or agency office of a foreign banking organization, licensed under the laws of the United States or any state and has been granted authority to operate with fiduciary powers;

(b) Regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies;

(c) Insured by the appropriate federal entity; and

(d) Qualified under any additional rules established by the director;

(3) "Security" or "security deposit", funds or other property received by the title insurer as collateral to secure an indemnitor's obligation under an indemnity agreement under which the insurer is granted a perfected security interest in the collateral in exchange for agreeing to provide coverage in a title insurance policy for a specific title exception to coverage.

2. A title insurer, title agency, or title agent not affiliated with a title agency may operate as an escrow, security, settlement, or closing agent, provided that all funds deposited with the title insurer, title agency, or title agent not affiliated with a title agency, pursuant to written instructions in connection with any escrow, settlement, closing, or security deposit shall be submitted for collection to or deposited in a separate fiduciary trust account or accounts in a qualified depository institution no later than the close of the second business day after receipt, in accordance with the following requirements:

(1) The funds regulated under this section shall be the property of the person or persons entitled to them under the provisions of the escrow, settlement, security deposit, or closing agreement and shall be segregated for each depository by escrow, settlement, security deposit, or closing in the records of the title insurer, title agency, or title agent not affiliated with a title agency, in a manner that permits the funds to be identified on an individual basis and in accordance with the terms of the individual written instructions or agreements under which the funds were accepted; and

(2) The funds shall be applied only in accordance with the terms of the individual written instructions or agreements under which the funds were accepted.

3. It is unlawful for any person to:

(1) Commingle personal or any other moneys with escrow funds regulated under this section;

(2) Use such escrow funds to pay or indemnify against debts of the title insurance agent or of any other person;

(3) Use such escrow funds for any purpose other than to fulfill the terms of the individual written escrow instructions after the necessary conditions of the written escrow instructions have been met;

(4) Disburse any funds held in an escrow account unless the disbursement is made under a written instruction or agreement specifying under what conditions and to whom such funds may be disbursed or under an order of a court of competent jurisdiction; or

(5) Disburse any funds held in a security deposit account unless the disbursement is made under a written agreement specifying:

(a) What actions the indemnitor shall take to satisfy his or her obligation under the agreement;

(b) The duties of the title insurer, title agency, or title agent not affiliated with a title agency with respect to disposition of the funds held, including a requirement to maintain evidence of the disposition of the title exception before any balance may be paid over to the depositing party or his or her designee; and

(c) Any other provisions the director may require by rule or order.

4. Notwithstanding the provisions of subsection 3 of this section, any bank credits, bank services, interest, or similar consideration received on funds deposited in connection with any escrow, settlement, security deposit, or closing may be retained by the title insurer, title agency, or title agent not affiliated with a title agency as compensation for administration of the escrow or security deposit, unless the specific written instructions for the funds or a governing statute provides otherwise.

5. Notwithstanding the provisions of subsection 2 of this section, a title insurer, title agency, or title agent is not authorized to provide such services as an escrow, security, settlement, or closing agent in a residential real estate transaction unless as part of the same transaction the title insurer, title agency, or title agent issues a commitment, binder, or title insurance policy and closing protection letters have been issued protecting the buyer's, lender's, and the seller's interests, or if a title insurance policy is not being issued by the title insurer, title agency, or title agent, the title insurer, the title agency, or title agent has given written notice to the affected person in a title insurance commitment or on a form approved by rule promulgated by the director that the person's interest in the closing or settlement is not protected by the title insurer, title agency, or title agent.

6. It is unlawful for any title insurer, title agency, or title agent to engage in the handling of an escrow, settlement or closing of a residential real estate transaction unless the escrow handling, settlement or closing is conducted or performed in contemplation of and in conjunction with the issuance of a title insurance policy and a closing protection letter, or if a title insurance policy is not being issued by the title insurer, title agency, or title agent, prior to the receipt of any funds, the title insurer, title agency, or title agent clearly discloses to the seller, buyer or lender involved in such escrow, settlement or closing, that no title insurer is providing any protection for closing or settlement funds received by the title agency or agent.

7. A violation of any provision under this section is a level three violation under section 374.049.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66, A.L. 2016 S.B. 833)

Underwriting claims and escrow practices, review of, requiredwhen--standards for review.

381.023. 1. A title insurer shall, at least annually, conduct an on-site review of the underwriting, claims, and escrow practices of the title agency or agent with which it has a contract. If the title agency or agent does not maintain separate fiduciary trust accounts for each title insurer it represents, the title insurer shall verify that the funds held on its behalf are reasonably ascertainable from the books of account and records of the title agency or agent.

2. Each title insurer authorized to do business in Missouri shall adopt and utilize the following standards and procedures for the on-site review of title agencies and agents. On-site review documentation, work papers, summaries, and reports shall be maintained by each title insurer for a period of at least four years and shall be made available to the director for examination upon request. A report shall be prepared by the title insurer at the completion of the on-site review setting forth the title insurer's findings. On-site review findings shall include, but not be limited to, the following:

(1) A review of contracts between the title insurer and the title agency or agent;

(2) A confirmation that the title agency or agent has prepared an annual statement of financial condition of the title agency or agent, certified by the title insurance agent or designated agent of the title agency under oath or by affirmation as being a true and accurate representation of financial condition;

(3) A review of policies and practices related to conflicts of interest affiliated business arrangements, and regulatory compliance;

(4) Reconciliation of orders with commitments, title searches, title policies, and collection of premiums;

(5) A review of the agent's procedures for tracking issued commitments;

(6) A review of the practices to cancel commitments on transactions that do not close;

(7) A review of the procedures for follow-up after closing to track status of outstanding conditions required for timely issuance of policies;

(8) A review of the procedures for voiding policies;

(9) A review of the tracking of open escrow, security, settlement or closing files;

(10) A review of issued policy reports to the title insurer by the title agency or agent;

(11) A review of any files awaiting policy issuance that includes a determination of the average length of time between closing and the issuance of the title policy; and

(12) A review of a three-way reconciliation of bank balance, book balance and escrow trial balance for each individual escrow bank account.

3. If the title agency or agent is an agency or agent for two or more title insurers, the title insurers may cooperate in complying with the requirements of this section and shall be exempt from liability for sharing findings with other title insurers represented by the agency or agent.

4. The title insurer shall provide a copy of the report of each such review it performs to the director. The director shall promulgate rules setting forth the minimum threshold level at which a review would be required, the standards thereof and the form of report required.

5. A violation of any provision under this section is a level two violation under section 374.049.

(L. 2007 S.B. 66)

Effective 1-01-08

Denial of access and failure to cooperate prohibited, penalty.

381.024. 1. It is unlawful for any title agency or title agent not affiliated with an agency to unreasonably deny access or fail to cooperate with its underwriters in the title insurers' reviews of the agency's or agent's escrow, settlement, closing and security deposit accounts.

2. It is unlawful for any title agency or title agent not affiliated with an agency, appointed by two or more title insurers, to deny any of the title insurers access to the fiduciary trust accounts in connection with providing escrow or closing settlement services, and any or all of the supporting account information in order to ascertain the safety and security of the funds held by the title agency or title agent.

3. A violation of any provision under this section is a level two violation under section 374.049.

(L. 2007 S.B. 66)

Effective 1-01-08

Consideration for referrals, when, penalty.

381.025. 1. As used in this section, the term "county" or "counties" includes any city not within a county.

2. Nothing in sections 381.011 to 381.412 shall be construed as prohibiting the division of premiums and charges between or among a title insurer and its title agent or agency, two or more title insurers, one or more title insurers and one or more title agents or agencies, or two or more title agents or agencies, provided such division of premiums and charges does not constitute a violation of the Real Estate Settlement Procedures Act, 12 U.S.C. Section 2601, et seq., as amended.

3. A violation of any provision under section 381.141* is a level three violation under section 374.049.

4. If the director fails to initiate a proceeding to enforce section 381.141* within forty-five days following receipt of written notice of such violation, any title insurer, title agency, or title agent doing business in the same county may maintain an action for injunctive relief against a title insurer, title agency, or title agent violating any provision of this section. In any action under this subsection, the court may award to the successful party the court costs of the action together with reasonable attorney fees.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

*Section 381.141 was repealed by S.B. 894, 2000. S.B. 894 was declared unconstitutional as a violation of the clear title requirement of Art. III, Sec. 23.

Recording of deeds and security instruments.

381.026. 1. The settlement agent shall present for recording all deeds and security instruments for real estate closings handled by it within five business days after completion of all conditions precedent thereto unless otherwise instructed by all of the parties to the transaction.

2. Nothing in this chapter shall be deemed to prohibit the recording of documents prior to the time funds are available for disbursement with respect to a transaction in which a title insurer, title agency, or title agent not affiliated with a title agency is the settlement agent, provided all parties to whom payment will become due upon such recording consent thereto in writing.

(L. 2007 S.B. 66)

Effective 1-01-08

Affiliated business--definitions--requirements--rules--violations.

381.029. 1. As used in this section, the following terms mean:

(1) "Affiliate", a specific person that directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the person specified;

(2) "Affiliated business", any portion of a title insurance agency's business written in this state that was referred to it by a producer of title insurance business or by an associate of the producer, where the producer or associate, or both, have a financial interest in the title agency;

(3) "Associate", any:

(a) Business organized for profit in which a producer of title business is a director, officer, partner, employee, or an owner of a financial interest;

(b) Employee of a producer of title business;

(c) Franchisor or franchisee of a producer of title business;

(d) Spouse, parent, or child of a producer of title insurance business who is a natural person;

(e) Person, other than a natural person, that controls, is controlled by, or is under common control with, a producer of title business;

(f) Person with whom a producer of title insurance business or any associate of the producer has an agreement, arrangement, or understanding, or pursues a course of conduct, the purpose or effect of which is to provide financial benefits to that producer or associate for the referral of business;

(4) "Control", including the terms "controlling", "controlled by", and "under common control with", the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position or corporate office held by the person. Control shall be presumed to exist if a person, directly or indirectly, owns, holds with the power to vote, or holds proxies representing ten percent or more of the voting securities of another person. This presumption may be rebutted by showing that control does not exist in fact. The director may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support the determination, that control exists in fact, notwithstanding the absence of a presumption to that effect;

(5) "Referral", the directing or the exercising of 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.

2. Whenever the business to be written constitutes affiliated business, prior to commencing the transaction, the title insurer, title agency, or title agent shall ensure that its customer has been provided with disclosure of the existence of the affiliated business arrangement and a written estimate of the charge or range of charges generally made for the title services provided by the title insurer, title agency, or agent.

3. The director shall establish rules for use by all title agencies in the recording and reporting of the agency's owners and of the agency's ownership interests in other persons or businesses and of material transactions between the parties.

4. The director shall require each title insurer, agency, and agent to file on forms prescribed by the director reports setting forth the names and addresses of those persons, if any, that have a financial interest in the insurer, agency, or agent and who the insurer, agency, or agent knows or has reason to believe are producers of title insurance business or associates of producers, except the duty to report shall not include shareholders of record of any publicly traded insurer.

5. Nothing in this chapter shall be construed as prohibiting affiliated business arrangements in the provision of title insurance business so long as:

(1) The title insurer, title agency, title agent, or party making a referral constituting affiliated business, at or prior to the time of the referral, discloses the arrangement and, in connection with the referral, provides the person being referred with a written estimate of the charge or range of charges likely to be assessed and otherwise complies with the disclosure obligations of this section;

(2) The person being referred is not required to use a specified title insurer, agency, or agent; and

(3) The only thing of value that is received by the title insurer, agency, agent, or party making the referral, other than payments otherwise permitted, is a return on an ownership interest. For purposes of this subsection, the terms "required use" and "return on an ownership interest" shall have the meaning accorded to them under the Real Estate Settlement Procedures Act (RESPA), as amended.

6. A violation of any provision under this section is a level two violation under section 374.049.

(L. 2007 S.B. 66)

Effective 1-01-08

Retention of records required, limitation, penalty for violation.

381.038. 1. For the purposes of this section, the term "direct operations" means that portion of a title insurer's operations which are attributable to business written by a bona fide employee.

2. Records relating to escrow and security deposits shall be preserved and retained by a title insurer engaged in direct operations, title agency, and title agent for as long as appropriate to the circumstances but, in no event less than seven years after the escrow or security deposit account has been closed.

3. A title agent and a title agency shall remit premiums to the title insurer under the term of its agency contract, but in no event later than within sixty days of receiving an invoice from the title insurer. A title insurer, title agency, or title agent shall promptly issue each title insurance policy within forty-five days after compliance with the requirements of the commitment for insurance, unless special circumstances as defined by rule delay the issuance.

4. This section shall not apply to a title insurer acting as coinsurer if one of the other coinsurers has complied with this section, and shall not apply to a reinsurer.

5. A violation of any provision under this section is a level two violation under section 374.049.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

Rules, authority, procedure.

381.042. 1. The director under the authority in section 374.045 may issue rules, regulations, and orders necessary to carry out the provisions of this chapter.

2. Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028. This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after January 1, 2008, shall be invalid and void.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

Violations, penalties.

381.045. 1. If the director determines that a person has engaged, is engaging, or has taken a substantial step toward engaging in an act, practice, omission or course of business constituting a violation in this chapter or a rule adopted or order issued pursuant thereto, or a person has materially aided or is materially aiding an act, practice, omission, or course of business constituting a violation in this chapter or a rule adopted or order issued pursuant thereto, the director may issue such administrative orders as authorized under section 374.046. The director may also suspend or revoke the license of a producer under section 375.141 or the certificate of authority of any title insurer as authorized under section 374.047 for any such willful violation.

2. If the director believes that a person has engaged, is engaging, or has taken a substantial step toward engaging in an act, practice, omission or course of business constituting a violation in this chapter or a rule adopted or order issued pursuant thereto, or that a person has materially aided or is materially aiding an act, practice, omission, or course of business constituting a violation in this chapter or a rule adopted or order issued pursuant thereto, the director may maintain a civil action for relief authorized under section 374.048.

3. Nothing contained in this section shall affect the right of the director to impose any other penalties provided for in the laws relating to the business of insurance.

4. Nothing contained in this chapter is intended to or shall in any other manner limit or restrict the rights of policyholders, claimants, and creditors.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

Court actions authorized, when.

381.048. 1. The director may bring an action against any title insurer, title agency, title agent, or any director, officer, agent, employee, trustee, or affiliate of a title insurer, title agency, or title agent in a court of competent jurisdiction to enjoin violations of the Real Estate Settlement Procedures Act, 12 U.S.C. Section 2607, as amended.

2. A violation of any provision under the federal Real Estate Settlement Procedures Act, as amended, is a level two violation under section 374.049.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

Persons authorized to conduct title insurance business.

381.052. No person other than a domestic, foreign, or non-United States title insurer organized on the stock plan and duly licensed by the director shall transact title insurance business as an insurer in this state.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

Powers of title insurer.

381.055. Subject to the exceptions and restrictions contained in this chapter, a title insurer shall have the power to:

(1) Do only title insurance business; and

(2) Reinsure title insurance policies.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

License required for insurer to transact business of title insurance,exclusive to other types of insurance business,limitations--closing or settlement protection authorized.

381.058. 1. No insurer that transacts any class, type, or kind of business other than title insurance shall be eligible for the issuance or renewal of a license to transact the business of title insurance in this state nor shall title insurance be transacted, underwritten, or issued by any insurer transacting or licensed to transact any other class, type, or kind of business.

2. A title insurer shall not engage in the business of guaranteeing payment of the principal or the interest of bonds or mortgages.

3. (1) Notwithstanding subsection 1 of this section or anything else to the contrary in sections 381.011 to 381.405, a title insurer is expressly authorized to issue closing or settlement protection letters (and to collect a fee for such issuance) in all transactions where its title insurance policies are issued and where its issuing agent or agency is performing settlement services and shall do so in favor of the applicable buyer, lender, or seller in all residential real estate transactions. Such closing or settlement protection letter form shall be filed with the director under section 381.085 and shall conform to the terms of coverage and form of instrument as required by rule of the director and shall indemnify a buyer, lender, or seller solely against losses not to exceed the amount of the settlement funds only because of the following acts of the title insurer's named issuing title agency or title agent:

(a) Acts of theft of settlement funds or fraud with regard to settlement funds; and

(b) Failure to comply with written closing instructions by the proposed insured when agreed to by the title agency or title agent relating to title insurance coverage.

(2) The rate for issuance of a closing or settlement protection letter in a residential real estate transaction indemnifying a lessee or purchaser of an interest in land, a borrower, or a lender secured by a mortgage, including any other security instrument, of an interest in land shall be filed as a rate with the director.

(3) The rate for issuance of a closing or settlement protection letter in a residential real estate transaction indemnifying a seller of an interest in land shall be filed as a separate rate with the director.

(4) Such filed rate shall not be excessive or inadequate. The entire rate for the closing or settlement protection letter shall be retained by the title insurer.

(5) Except as provided under this section or section 381.403, a title insurer shall not provide any other coverage which purports to indemnify against improper acts or omissions of a person with regard to escrow, settlement, or closing services.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66, A.L. 2016 S.B. 833)

Establishment and maintenance of minimum paid-in capital and paid-ininitial surplus necessary for insurance business license.

381.062. Any title insurer authorized to do an insurance business in this state shall establish and maintain a minimum paid-in capital of not less than four hundred thousand dollars and, in addition, surplus of at least four hundred thousand dollars. Beginning January 1, 2013, any title insurer authorized to do an insurance business in this state shall establish and maintain a minimum paid-in capital of not less than eight hundred thousand dollars and, in addition, surplus of at least eight hundred thousand dollars.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

Net retained liability limits, maximum amount--reinsuranceallowed--waiver by director of risk, when.

381.065. 1. The net retained liability of a title insurer for a single risk in regard to real property located in this state, or in regard to a title insurance policy issued in this state and insuring personal property, whether assumed directly or as reinsurance, shall not exceed the aggregate of fifty percent of surplus as regards policyholders plus the statutory premium reserve less the company's investment in title plants, all as shown in the most recent annual statement of the insurer on file with the director.

2. For purposes of this chapter:

(1) A single risk shall be the insured amount of any title insurance policy, except that, where two or more title insurance policies are issued simultaneously covering different estates in the same property, a single risk shall be the sum of the insured amounts of all the title insurance policies; and

(2) A policy under which a claim payment reduces the amount of insurance under one or more other title insurance policies shall be included in computing the single risk sum only to the extent that its amount exceeds the aggregate amount of the policy or policies whose amount of insurance is reduced.

3. A title insurer may obtain reinsurance for all or any part of its liability under its title insurance policies or reinsurance agreements and may also reinsure title insurance policies issued by other title insurers on single risks located in this state or elsewhere. Reinsurance on policies issued on real property located in this state, or on policies issued in this state and insuring personal property, may be obtained from any title insurers licensed to transact title insurance business in this state, any other state, or the District of Columbia and which have a combined capital and surplus of at least one million six hundred thousand dollars.

4. The director may waive the limitation of this section for a particular risk upon application of the title insurer and for good cause shown.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

Investment in title plant, amount restricted, considered asset.

381.068. In determining the financial condition of a title insurer doing business under this chapter, the general investment provisions of sections 379.080 to 379.082 shall apply; except that, an investment in a title plant or plants in an amount equal to the actual cost shall be allowed as an admitted asset for title insurers. The aggregate amount of the investment shall not exceed twenty percent of surplus to policyholders, as shown on the most recent annual statement of the title insurer on file with the director.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

Insurer's duties, policies--examination of title, determination ofinsurability--showing of liens against title--records kept,duration--exceptions to requirements.

381.071. 1. No title insurance policy shall be written unless and until the title insurer, title agent, or agency has:

(1) Caused a search of title to be made from the evidence prepared from a title plant of the county where the property is located as herein defined, or if no such title plant of the county exists, or the owner of such plant refuses to furnish the title insurer, title agent, or agency desiring to insure, such title evidence at a reasonable charge and within a reasonable period of time, then such policy of title insurance shall be based upon the best title evidence available. An attorney licensed to practice law in this state may upon personal inspection use the best evidence available in any county and is not subject to the provisions of the title plant requirement of sections 381.011 to 381.241. The records on which the title plant is based on shall show all prior matters affecting the title to the property or interest therein for a continuous period of time of at least:

(a) The past ten years, by two years after September 28, 1987;

(b) The past fifteen years, by three years after September 28, 1987;

(c) The past twenty years, by four years after September 28, 1987; and

(d) The past twenty-seven years, by five years after September 28, 1987; and

(2) Caused to be made a determination of insurability of title in accordance with sound underwriting practices.

2. Except when allowed by regulations promulgated by the director, no title insurer, title agent, or agency shall knowingly issue any owner's title insurance policy or commitment to insure without showing all outstanding, enforceable recorded liens or other interests against the title which is to be insured.

3. Evidence of the examination of title and determination of insurability shall be preserved and retained in the files of the title insurer or its title agent or agency for a period of not less than fifteen years after the title insurance policy has been issued. Instead of retaining the original evidence, the title insurer or title agent or agency may in the regular course of business establish a system whereby all or part of the evidence is recorded, copied, or reproduced by any process that accurately and legibly reproduces or forms a durable medium for reproducing the contents of the original.

4. This section shall not apply to:

(1) A title insurer assuming liability through a contract of reinsurance;

(2) A title insurer acting as coinsurer if one of the other coinsuring title insurers has complied with this section; or

(3) Policies of title insurance issued prior to the expiration of one year after September 28, 1987.

(L. 1987 S.B. 251 § 9, A.L. 1988 S.B. 798)

Reserve requirements, reserve to cover all known claims--unearnedpremium reserve, amount, actuarial certification required,supplemental reserve, amount, deadline.

381.072. 1. In determining the financial condition of a title insurer doing business under this chapter, the general provisions of the laws regulating the business of insurance requiring the establishment of reserves sufficient to cover all known and unknown liabilities, including allocated and unallocated loss adjustment expense, shall apply; except that, a title insurer shall establish and maintain:

(1) (a) A known claim reserve in an amount estimated to be sufficient to cover all unpaid losses, claims, and allocated loss adjustment expenses arising under title insurance policies for which the title insurer may be liable, and for which the insurer has discovered or received notice by or on behalf of the insured or escrow or security depositor;

(b) Upon receiving notice from or on behalf of the insured of a title defect in or lien or adverse claim against the title of the insured that may result in a loss or cause expense to be incurred in the proper disposition of the claim, the title insurer shall determine the amount to be added to the reserve, which amount shall reflect a careful estimate of the loss or loss expense likely to result by reason of the claim;

(c) Reserves required under this section may be revised from time to time and shall be redetermined at least once each year;

(2) A statutory or unearned premium reserve established and maintained as follows:

(a) A domestic title insurer shall establish and maintain an unearned premium reserve computed in accordance with this section, and all sums attributed to such reserve shall at all times and for all purposes be considered and constitute unearned portions of the original premiums. This reserve shall be reported as a liability of the title insurer in its financial statements;

(b) The unearned premium reserve shall be maintained by the title insurer for the protection of holders of title insurance policies. Except as provided in this section, assets equal in value to the reserve are not subject to distribution among creditors or stockholders of the title insurer until all claims of policyholders or claims under reinsurance contracts have been paid in full, and all liability on the policies or reinsurance contracts has been paid in full and discharged or lawfully reinsured;

(c) The unearned premium reserve shall consist of:

a. The amount of the unearned premium reserve on January 1, 2008;

b. A sum equal to fifteen cents for each one thousand dollars of net retained liability under each title insurance policy, excluding mortgagee's policies simultaneously issued with owner's policies or owner's leasehold policies of the same or greater amount, on a single risk written on properties located in this state and issued after January 1, 2008; and

c. Unearned premium for closing protection letters;

(d) Amounts placed in the unearned premium reserve in any year in accordance with paragraph (c) of this subdivision shall be deducted in determining the net profit of the title insurer for that year;

(e) A title insurer shall release from the unearned premium reserve a sum equal to ten percent of the amount added to the reserve during a calendar year on July first of each of the five years following the year in which the sum was added, and shall release from the unearned premium reserve a sum equal to three and one-third percent of the amount added to the reserve during that year on each succeeding July first until the entire amount for that year has been released. The amount of the unearned premium reserve or similar unearned premium reserve maintained before January 1, 2008, shall be released in accordance with the law in effect immediately before January 1, 2008;

(f) a. Each domestic and foreign title insurer shall file annually with the audited financial report required under section 375.1032 an actuarial certificate made by a member in good standing of the American Academy of Actuaries, or by an actuary permitted to make such certificate by the commissioner, superintendent or director of the department of insurance of the state of incorporation of a foreign title insurer;

b. The actuarial certification shall conform to the annual statement instructions for title insurers adopted by the National Association of Insurance Commissioners and shall include the actuary's professional opinion of the insurer's reserves as of the date of the annual statement. The reserves analyzed under this section shall include reserves for known claims, including adverse developments on known claims, and reserves for incurred but not reported claims;

(g) Each domestic and foreign title insurer shall establish a supplemental reserve in the amount by which the actuarially certified reserves exceed the total of the known claim reserve and statutory premium reserve as set forth in the title insurer's annual financial report, subject to this subdivision.

2. A foreign or alien title insurer licensed to transact title insurance business in this state shall maintain at least the same reserves on title insurance policies issued on properties located in this state as are required of domestic title insurers, unless the laws of the jurisdiction of domicile of the foreign or alien title insurer require a higher amount.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

Additional insurance laws applicable to title insurers, insurer'ssupervision, rehabilitation and liquidation act,exceptions--liquidation or insolvency, treatment of security andescrow funds, filing of claims, cancellation of policies, paymentof fully earned premiums.

381.075. 1. Sections 375.570 to 375.750 and sections 375.1150 to 375.1246 shall apply to all title insurers subject to this chapter, except as otherwise provided in this section. In applying such sections, the court shall consider the unique aspects of title insurance and shall have broad authority to fashion relief that provides for the maximum protection of the title insurance policyholders.

2. Security and escrow funds held by or on behalf of the title insurer shall not become general assets and shall be administered as secured claims as defined in section 375.1152.

3. Title insurance policies that are in force at the time an order of liquidation is entered shall not be cancelled except upon a showing to the court of good cause by the liquidator. The determination of good cause shall be within the discretion of the court. In making this determination, the court shall consider the unique aspects of title insurance and all other relevant circumstances.

4. The court may set appropriate dates that potential claimants must file their claims with the liquidator. The court may set different dates for claims based upon the title insurance policy than for all other claims. In setting dates, the court shall consider the unique aspects of title insurance and all other relevant circumstances.

5. As of the date of the order of insolvency or liquidation, all premiums paid, due or to become due under policies of the title insurers shall be fully earned. It shall be the obligation of title agencies, title agents, insureds, or representatives of the title insurer to pay fully earned premium to the liquidator or rehabilitator.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

Forms, director to approve before use--contents concerning coverage ofpolicy, when included--disapproval by director, procedure.

381.085. 1. As used in sections 381.011 to 381.412, the terms "search", "search of the public records", or "search of title", mean a search of those records established by the laws of this state for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without knowledge.

2. A title insurer shall not deliver or issue for delivery or permit any of its authorized title agencies or title agents to deliver in this state any standard form providing coverage, in connection with title insurance written, unless the standard form has been filed with the director thirty days prior to use.

3. Forms covered by this section shall include:

(1) Title insurance policies, including standard form endorsements;

(2) Title insurance commitments issued prior to the issuance of a title insurance policy; and

(3) Closing or settlement protection letters.

4. Any term or condition related to an insurance coverage provided by a title insurance policy or any exception to the coverage, except exceptions ascertained from, or affirmative coverages offered as a result of, a search and examination of records relating to a title or inspection or survey of a property to be insured, may only be included in the policy after the term, condition or exception has been filed with the director as herein provided.

5. The director shall review such form, term, condition, or exception within thirty days. If within this time the director believes the form, term, condition, or exception is not in compliance with the insurance laws of this state or does not contain such words, phraseology, conditions, and provisions which are specific, certain, and unambiguous and reasonably adequate to meet the needed requirements of those insured under such policies, the director may schedule a hearing to be held within sixty days and at such hearing receive evidence and suggestions of law on the matter.

6. If the director determines after a hearing that a form, term, condition, or exception shall be disapproved, the director shall issue an order disapproving the form, term, condition, or exception in a record and with findings of fact and conclusions of law in accordance with the provisions of chapter 536. A final order may not be issued unless the director specifies the provisions of law that have not been complied with or the words, phraseology, conditions, or provisions which are not specific, certain and unambiguous and reasonably adequate to meet the needed requirement of those insured under such policies. A final order of disapproval is subject to judicial review under the provisions of chapter 536. During the pending of any proceeding under this section, all such forms may be used, but this provision shall not deprive the director or department of any other enforcement power over such forms that may be otherwise provided by law.

7. The failure of the director to seek disapproval does not constitute an approval or endorsement of the form, term, condition, or exception by the director. It is unlawful to make any representation that the director has approved a form, term, condition, or exception filed under this section.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

Premium tax, premium income defined.

381.112. For purposes of the premium tax imposed by sections 148.320 and 148.340, the "premium income received by a title insurer" shall mean the amount within the definition of "premium".

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

Licensing required for title agencies and title agents,exceptions--delegation of title searches to third party,rules--violations, penalty.

381.115. 1. It is unlawful for any person to transact the business of title insurance unless authorized as a title insurer, title agency or title agent.

2. It is unlawful for any person to transact business as:

(1) A title agency, unless the person is a licensed business entity insurance producer under subsection 2 of section 375.015; or

(2) A title agent, unless the person is a licensed individual insurance producer under subsection 1 of section 375.015 or is exempt from licensure under subsection 3 of this section.

3. A salaried employee of a title insurer, title agency, or title agent is exempt from licensure as a title agent if the employee does not materially perform or supervise others who perform any of the following:

(1) Sell, solicit, or negotiate a title insurance policy or closing protection letter;

(2) Calculate premiums for a title insurance policy or closing protection letter;

(3) Determine insurability;

(4) Establish, calculate, or negotiate title charges;

(5) Conduct title search or examinations;

(6) Execute title insurance policies, commitments, binders or endorsements; or

(7) Handle escrows, settlements, or closings.

4. It is unlawful for any title insurer to contract with any person to act in the capacity of a title agency or title agent with respect to risks located in this state unless the person is licensed as required in this section.

5. The director shall adopt rules, regulations, or requirements relating to licensing and practices of persons acting in the capacity of title agencies or agents. These persons may include title agencies, title agents and employees of title insurers or title agencies. Such rules, regulations, or requirements shall, until at least January 1, 2010, permit either provisional licensure or waiver of licensure for employees newly performing functions described in subsection 3 of this section, while under the direct supervision of a licensed insurance producer during the first six months of such employee's initial employment. This subsection is not intended to require licensure of persons performing a clerical function under the direct supervision and direction of a licensed insurance producer.

6. Every title agency licensed in this state shall:

(1) Exclude or eliminate the word insurer, insurance company, or underwriter from its business name, unless the word agency is also included as part of the name; and

(2) Provide, in a timely fashion, each title insurer with which it places business any information the title insurer requests in order to comply with reporting requirements of the director.

7. A title agency or title agent licensed in this state prior to the effective date of this chapter shall have ninety days after the effective date of this chapter to comply with the requirements of this section.

8. If the title insurer, title agency, or title agent delegates the title search to a third party, such as an abstract company, the insurer, agency, or agent must first obtain proof that the third party is operating in compliance with rules and regulations established by the director and the third party shall provide the insurer, agency, or agent with access to and the right to copy all accounts and records maintained by the third party with respect to business placed with the title insurer. Proof from the third party may consist of a signed statement indicating compliance, and shall be effective for a three-year period.

9. A violation of any provision under this section is a level three violation under section 374.049.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

Examination required--education requirements, exemptions--approvedcourses and programs--teaching credit--credits may be carriedforward--extensions and waivers--certification to director ofcompletion--nonresidents--rules--funds, depositing and use--feesfor license renewal.

381.118. 1. Each title agency shall designate an individual as a qualified principal, who as a condition of licensure shall successfully pass an examination developed by the producer advisory board established by section 375.019 and approved by the director. Each title agent shall successfully pass an examination developed by the producer advisory board and approved by the director. Upon request by a title agency or agent and for good cause, the director, by order, may waive the requirements of this subsection. The examination requirement in this subsection shall be waived for all title agents and qualified principals who are licensed in this state as of January 1, 2008.

2. Each title agent licensed to sell title insurance in this state, unless exempt under subsection 8 of this section, shall successfully complete courses of study as required by this section. Any person licensed to act as a title agent shall, during each two years, attend courses or programs of instruction or attend seminars equivalent to a minimum of eight hours of instruction. The initial such two-year period shall begin January 1, 2008.

3. Subject to approval by the director, the courses or programs of instruction which shall be deemed to meet the director's standards for continuing educational requirements shall include, but not be limited to, the following:

(1) A real property law or title insurance-related course taught by an accredited college or university or qualified instructor who has taught a course of real property or title insurance law at such institution;

(2) A course or program of instruction or seminar approved by the director developed or sponsored by any authorized insurer, recognized agents' association, title insurance trade association, or approved private provider. A local agents' group may also be approved if the instructor receives no compensation for services;

(3) Courses approved for continuing legal education credit by the Missouri Bar.

4. A person teaching any approved course of instruction or lecturing at any approved seminar without compensation shall qualify for one and one-half times the number of classroom hours as would be granted to a person taking and successfully completing such course, seminar or program, but the credit may be credited no more than once a year.

5. Excess classroom hours accumulated during any two-year period may be carried forward to the two-year period immediately following the two-year period in which the course, program, or seminar was held.

6. For good cause shown, the director may grant an extension of time during which the educational requirements imposed by this section may be completed, but such extension of time shall not exceed the period of one calendar year. The director may grant an individual waiver of the mandatory continuing education requirement upon a showing by the licensee that it is not feasible for the licensee to satisfy the requirements prior to the renewal date. Waivers may be granted for reasons including, but not limited to:

(1) Serious physical injury or illness;

(2) Active duty in the armed services for an extended period of time;

(3) Residence outside the United States; or

(4) Licensee is at least seventy years of age and is currently licensed as a title agent.

7. Every person subject to the provisions of this section shall furnish in a form satisfactory to the director written certification as to the courses, programs, or seminars of instruction taken and successfully completed by such person.

8. The provisions of this section shall not apply to those natural persons holding or applying for a license to act as a title agent in Missouri who reside in a state that has enacted and implemented a mandatory continuing education law or regulation pertaining to title agents. However, those natural persons holding or applying for a Missouri agent license who reside in states which have no mandatory continuing education law or regulations shall be subject to all the provisions of this section to the same extent as resident Missouri title agents.

9. Rules necessary to implement and administer this section shall be promulgated by the director, including, but not limited to, rules regarding the following:

(1) The producer advisory board established by section 375.019 shall be utilized by the director to assist the director in determining acceptable content of courses, programs and seminars to include classroom equivalency;

(2) Every applicant seeking approval by the director of a continuing education course under this section shall pay to the director a filing fee of fifty dollars per course, except that such total fee shall not exceed two hundred fifty dollars per year for any single applicant. Fees shall be waived for local agents' groups if the instructor receives no compensation for services. Such fee shall accompany any application form required by the director. Courses shall be approved for a period of no more than one year. Applicants holding courses intended to be offered for a longer period must reapply for approval.

10. All funds received under the provisions of this section shall be transmitted by the director to the department of revenue for deposit in the state treasury to the credit of the insurance dedicated fund. All expenditures required by this section shall be paid from funds appropriated from the insurance dedicated fund by the general assembly.

11. When a title agent pays his or her biennial renewal fee, such agent shall also furnish the written certification required by this section.

12. Any rule or portion of a rule, as that term is defined in section 536.010, that is created pursuant to the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028. This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after January 1, 2008, shall be invalid and void.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

Director authorized to inspect books and records.

381.122. The director may during normal business hours examine, audit and inspect any and all books and records maintained by a title insurer, title agency, or title agent under this chapter.

(L. 2000 S.B. 894, A.L. 2007 S.B. 66)

Effective 1-01-08

Contract of title insurance through specific agent, agency, or insurerprohibited.

381.161. 1. No producer or other person, except the person paying the premium for the title insurance, shall require, directly or indirectly, or through any trustee, director, officer, agent, employee, or affiliate, as a condition, agreement, or understanding to selling or furnishing any other person any loan, or extension thereof, credit, sale, property, contract, lease or service, that such other person shall place any contract of title insurance of any kind through any particular title agent, agency, or title insurer. No title agent, agency, or title insurer shall knowingly participate in any such prohibited plan or transaction. No person shall fix a price charged for such thing or service, or discount from or rebate upon price, on the condition, agreement, or understanding that any title insurance is to be obtained through a particular agent, agency, or title insurer.

2. A violation of any provision under this section is a level three violation under section 374.049.

(L. 1987 S.B. 251 § 18, Repealed L. 2000 S.B. 894 § D, L. 2007 S.B. 66)

Effective 1-01-08

Definitions.

381.400. 1. As used in this section and sections 381.403 and 381.405, the following terms mean:

(1) "Construction completion guaranty", an agreement wherein a person guarantees or warrants that the improvements which are the subject of the guaranty will be completed or that the funds deposited under the guaranty are sufficient to complete such improvements;

(2) "Construction deposit guaranty", an agreement wherein a person agrees to accept funds from a mortgage lender, owner or purchaser of real estate or agrees to assure the proper application of funds already paid to a third party to pay for the cost of construction of improvements on such real estate, for disbursement to parties furnishing labor or material for the construction of such improvement and wherein the person guarantees to the party depositing the funds against loss from misapplication of the funds or inability to obtain a refund of the funds when such party is entitled to a refund thereof;

(3) "Construction escrow agreement", an agreement wherein a person agrees to accept from a mortgage lender, owner or purchaser of real estate funds to pay for the cost of construction of improvements on such real estate, for disbursement to the owner, general contractor, or parties furnishing labor or material for the construction of such improvement, but which does not contain any guarantee to the party depositing the funds against loss from misapplication of the funds or inability to obtain a refund of the funds. The issuance of title insurance against mechanics' liens does not constitute a construction deposit guaranty or construction completion guaranty;

(4) "Insured closing letter", a statement issued by a title insurance company to a party to a real estate transaction, acknowledging that the title insurance agency or agent closing a transaction in connection with which the title insurance company's policy is being issued, is a duly licensed and authorized agency or agent of the title insurance company, that the performance of settlement services by such agency or agent is within the scope of its authority as agency or agent for the title insurance company, and promising to be responsible for the misapplication of funds or documents by the agency or agent or its failure to follow written instructions in connection with the closing;

(5) "Licensee", a title insurance company organized under the laws of this state or operating under a certificate of authority in this state, or a title insurance agency or agent licensed by the director.

(L. 1993 S.B. 18 § 381.143 subsec. 1)

Title insurance companies and agents may enter into constructionescrow agreements and issue insured closing letters.

381.403. Licensees may:

(1) Enter into construction escrow agreements as part of their services as title insurance companies or title insurance agencies;

(2) Issue insured closing letters, if the licensee is a title insurance company.

(L. 1993 S.B. 18 § 381.143 subsec. 2)

Construction and guaranty agreements not authorized for titleinsurance companies--title insurance against mechanic liens andinsured closing letters, authorized.

381.405. No licensee may enter or offer to enter into any:

(1) Construction deposit guaranty;

(2) Construction completion guaranty;

(3) Contract of guaranty or suretyship wherein the licensee agrees to answer for the debt, obligation or default of a third party, including, but not limited to, statements of responsibility for the acts or omissions of parties which would constitute an insured closing letter if the party on whose behalf the statement is made had been a title insurance agency or agent for the issuer. The provisions of this section shall not prohibit licensees from issuing title insurance against mechanics' liens, nor prohibit a title insurance company from issuing insured closing letters regarding its own duly licensed agency or agent.

(L. 1993 S.B. 18 § 381.143 subsec. 3)

Definitions.

381.410. As used in this section and section 381.412, the following terms mean:

(1) "Cashier's check", a check, however labeled, drawn on the financial institution, which is signed only by an officer or employee of such institution, is a direct obligation of such institution, and is provided to a customer of such institution or acquired from such institution for remittance purposes;

(2) "Certified funds", United States currency, funds conveyed by a cashier's check, certified check, teller's check, as defined in Federal Reserve Regulations CC, or wire transfers, including written advice from a financial institution that collected funds have been credited to the settlement agent's account;

(3) "Director", the director of the department of insurance, financial institutions and professional registration, unless the settlement agent's primary regulator is another department. When the settlement agent is regulated by such department, that department shall have jurisdiction over this section and section 381.412;

(4) "Financial institution":

(a) A person or entity doing business under the laws of this state or the United States relating to banks, trust companies, savings and loan associations, credit unions, commercial and consumer finance companies, industrial loan companies, insurance companies, small business investment corporations licensed under the Small Business Investment Act of 1958, 15 U.S.C. Section 661, et seq., as amended, or real estate investment trusts as defined in 26 U.S.C. Section 856, as amended, or institutions constituting the Farm Credit System under the Farm Credit Act of 1971, 12 U.S.C. Section 2000, et seq., as amended; or

(b) A mortgage loan company or mortgage banker doing business under the laws of this state or the United States which is subject to licensing, supervision, or auditing by the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation, or the United States Veterans' Administration, or the Government National Mortgage Association, or the United States Department of Housing and Urban Development, or a successor of any of the foregoing agencies or entities, as an approved seller or servicer, if their principal place of business is in Missouri or a state which is contiguous to Missouri;

(5) "Settlement agent", a person, corporation, partnership, or other business organization which accepts funds and documents as fiduciary for the buyer, seller or lender for the purposes of closing a sale of an interest in real estate located within the state of Missouri, and is not a financial institution, or a member in good standing of the Missouri Bar, or a person licensed under chapter 339.

(L. 1996 S.B. 664, A.L. 2000 S.B. 894, A.L. 2007 S.B. 66, A.L. 2008 S.B. 788)

Settlement agents, accepting funds, exemption--title insurer, depositof funds--violation, fine.

381.412. 1. A settlement agent who accepts funds of more than two thousand five hundred dollars for closing a real estate transaction shall require a buyer, seller, or lender who is not a financial institution to convey such funds to the settlement agent as certified funds. A check shall be exempt from the provisions of this section if drawn on:

(1) An escrow account of a licensed real estate broker, as regulated and described in section 339.105; or

(2) An escrow account of a title insurer or title insurance agency licensed to do business in Missouri; or

(3) An agency of the United States of America, the state of Missouri, or any county or municipality of the state of Missouri; or

(4) An account by a financial institution.

2. It is unlawful for any title insurer, title agency, or title agent, as defined in section 381.009*, to make any payment, disbursement or withdrawal from an escrow account which it maintains as a depository of funds received from the public for the settlement of real estate transactions unless a corresponding deposit of funds was made to the escrow account for the benefit of the payee or payees:

(1) At least ten days prior to such payment, disbursement, or withdrawal; or

(2) Which consisted of certified funds; or

(3) Consisted of a check made exempt from this section by the provisions of subsection 1 of this section.

3. A violation of any provision of this section is a level two violation under section 374.049.

(L. 1996 S.B. 664, A.L. 1997 S.B. 148, A.L. 2000 S.B. 894, A.L. 2007 S.B. 66, A.L. 2008 S.B. 1009)

Effective 6-10-08

*Section 381.009 was repealed by S.B. 66, 2007.


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