2006 Louisiana Laws - RS 22:2092.2 — Definitions

§2092.2.  Definitions

As used only in this Part, the following words are defined as:

(1)  "Abstract of title" or "abstract" shall mean a written history, synopsis, or summary of the recorded instruments affecting the title to movable or immovable property.

(2)  "Closing" shall mean "settlement" as the term is defined by Paragraph (15) of this Section.

(3)  "Department" shall mean the Department of Insurance or its employees, deputies, or representatives or the equivalent department or state entity that provides insurance regulation in another state.

(4)  "Depositor" shall mean the person providing the funds or documents for delivery to the depository in connection with a transaction involving immovable property.

(5)  "Depository" shall mean the title insurer, title insurance agent, or qualified financial institution receiving a deposit of funds or documents.

(5.1)  "Depository check" shall mean a depository check as defined by the Expedited Funds Availability Act, 12 U.S.C. 4001 et seq.

(6)  "Escrow" shall mean the act or process of providing closing and settlement services or services pursuant to an escrow agreement by the title insurer or title insurance agent.

(7)  "Escrow account" shall mean the demand deposit account maintained by a title insurer or title insurance agent at a qualified financial institution into which the insurer or agent deposits all funds collected from any person who is or will be a party to a transaction involving immovable property in which a title insurance policy is contemplated to be issued.

(8)  "Escrow agreement" shall mean the written agreement by which a depositor delivers funds or documents to a title insurer or title agent and which specifies the conditions to be satisfied or the event to be performed before the release or delivery of the funds or documents to another person.

(9)  "Escrow instructions" shall mean the written instructions or directions furnished in connection with the closing of a real estate transaction in which title insurance is contemplated to be issued, and shall include but not be limited to a closing or settlement statement, purchase agreement for immovable property, lender's written instructions or directions, escrow agreement, or written directive.

(10)  "Funds" shall mean money, or "items" as that term is defined in R.S. 10:4-104(a)(9), and "checks" as that term is defined in R.S. 10:3-104(f).

(11)  "Person" shall mean any natural or juridical person, or any partnership, association, cooperative, corporation, firm, trust, limited liability company, or other legal entity.

(12)  "Qualified financial institution" shall mean an institution that is:

(a)  Organized or licensed under the laws of the United States or any state thereof and has been granted authority to operate with fiduciary powers.

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

(c)  Insured by the appropriate federal entity.

(13)  "Risks" shall mean the danger or hazards of a loss of title to movable or immovable property by the insured under a title insurance policy.

(14)  "Security agreement" shall mean an agreement by which funds or other property are received by the title insurer or the title insurance agent as collateral to secure the obligation of a person under an indemnity agreement to indemnify or protect a title insurer in exchange for agreeing to provide coverage in a title insurance policy.

(15)  "Settlement" shall mean the process of executing legally binding documents in a transaction involving either movable or immovable property, including the transfer of title or creation of a lien on the title, or the collection and disbursement of funds in connection therewith.

(16)  "Title insurance agent" or "agent" shall mean a person authorized on behalf of the title insurer to issue title insurance reports or policies.

(17)  "Title insurance business" or "business of title insurance" shall mean:

(a)  Issuing as an insurer or offering to issue as insurer a title insurance policy; or

(b)  Transacting or proposing to transact by a title insurer or a title insurance agent any of the following activities when conducted or performed in contemplation of or in conjunction with the issuance of a title insurance report or policy:

(i)  Soliciting or negotiating the issuance of a title insurance policy.

(ii)  Guaranteeing, warranting, or otherwise insuring the status of title, liens, encumbrances or other matters of record.

(iii)  Handling of escrows, settlements, or closings.

(iv)  Executing title insurance policies.

(v)  Effecting contracts of reinsurance.

(vi)  Examining titles; however, any title insurance report or title insurance policy relating to immovable property shall be based upon an examination of title which shall be conducted only by attorneys duly licensed and authorized to practice law in Louisiana.  The examination and resulting opinion, if it furnishes the basis of a title insurance report or title insurance policy relating to immovable property, shall be reduced to writing by the attorney. The title opinion shall contain the following:

(aa)  Complete name of individuals with an ownership or other interest in the property.

(bb)  Complete list of all encumbrances, mortgages, judgments, liens, and privileges.  This list shall contain the name of secured creditors, date filed, amounts, and recordation information.

(cc)  Complete list of all servitudes, rights-of-way, leases, options, rights of first refusal, and usufructs encumbering the property.

(dd)  Legal description of property examined.

(ee)  Any curative measures which are required in order to render title merchantable.

(ff)  All parish and municipal property taxes which are past due.

(gg)  Length of examiner's search and date of earliest recorded instrument reviewed by the examiner.

(hh)  Name and attorney bar roll number of the examining attorney.

(vii)  Collecting, disbursing, or receiving premiums, escrow, settlement, or other funds.

(viii)  Recording closing documents.

(c)  Doing or proposing to do any business substantially equivalent to any of the foregoing in a manner designed to evade the provisions of this Part.

(18)  "Title insurance policy" or "policy" shall mean a contract, including any affirmative assurances, enhancements to coverage, or endorsements, insuring or indemnifying owners of, or other persons lawfully interested in, movable or immovable property against loss or damage arising from any or all of the following conditions existing on, before, or subsequent to the policy date and not specifically excepted or excluded:

(a)  Defects in or liens or encumbrances on the insured title.

(b)  Unmarketability of the insured title.

(c)  Invalidity or unenforceability of liens or encumbrances on the insured title of the movable, where a title search is required for the purpose of registration, or immovable property.

(d)  Title being vested otherwise than as stated in the policy.

(e)  Lack of a legal right of access to the land which is part of the insured title in a policy relating to immovable property.

(f)  Lack of priority of the lien of any insured mortgage over any statutory lien for services, labor, or materials as specifically described in the policy.

(g)  Invalidity or unenforceability of any assignment of an insured mortgage subject to certain conditions.

(h)  The priority of any lien or encumbrance over the lien of the insured mortgage.

(19)  "Title insurance report" or "report" shall mean a preliminary report, commitment, or binder issued prior to the issuance of a title insurance policy containing the requirements, terms, conditions, exceptions, and any other matters incorporated by reference under which the title insurer is willing to issue its title insurance policy.

(20)  "Title insurer" or "insurer" shall mean a company authorized under the laws of this state to transact the business of title insurance.

(21)  "Underwrite" shall mean the acceptance or rejection of risk on behalf of the title insurer.

Acts 1997, No. 1427, §1; Acts 1999, No. 192, §1, eff. June 9, 1999; Acts 2006, No. 828, §1.