2013 North Dakota Century Code Title 26.1 Insurance Chapter 26.1-20 Title Insurance Companies
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CHAPTER 26.1-20
TITLE INSURANCE COMPANIES
26.1-20-01. Title insurance company subject to insurance company requirements.
Every domestic or foreign corporation organized for the purpose of insuring titles to real
property in this state or of insuring against loss by reason of defective titles thereto, or
encumbrances thereon, is subject to and shall comply with all the requirements of the laws of
this state made applicable to insurance companies generally and the rules of the commissioner,
except as provided in this chapter or when the laws and rules are inconsistent with this chapter.
26.1-20-02. Capital stock and surplus requirement.
A domestic corporation organized for the purpose of insuring titles to real property in this
state or of insuring against loss by reason of defective titles to real property, or encumbrances
on real property, may not be incorporated unless it has an authorized capital of not less than five
hundred thousand dollars and a surplus of not less than five hundred thousand dollars if a stock
company, and a surplus of not less than five hundred thousand dollars if a mutual company. If
the capital or surplus requirements at the time the company was incorporated under this chapter
were less than the minimum requirements provided by this section, the company may maintain
authorized capital or surplus which satisfies the capital stock or surplus requirements in effect at
that time. It may issue no policy or insurance until at least fifty percent of the minimum capital
stock required by this section, and all the surplus required, have been paid in, the residue of
capital stock to be paid in within twelve months from the time of filing the articles of
incorporation, but the commissioner, for good cause shown, may extend the time of payment of
the residue for the further period of one year.
26.1-20-03. Surplus to constitute guaranty fund - Deposit.
The surplus provided for in section 26.1-20-02 constitutes a guaranty fund, which must be
invested in securities as provided by section 26.1-05-19, and be duly deposited with the
commissioner, and the commissioner's certification of that deposit must be procured, as
provided by law. This deposit must be maintained unimpaired and the principal of the fund may
be applied only to the payment of losses and expenses by reason of its guaranty and insurance
contracts, but the corporation has the right to collect the income from the deposit and to
substitute other like securities of equal amount and value from time to time.
26.1-20-04. Limitation on risks.
A title insurance company transacting business in this state may not expose itself to loss on
any one risk or hazard to an amount exceeding fifty percent of its paid-up capital and surplus if a
stock company, or fifty percent of its surplus if a mutual company, unless the excess is
reinsured.
26.1-20-05. Title evidence - Examination.
A domestic corporation organized for the purpose of insuring title to real property in this
state or of insuring against loss by reason of defective titles to real property, or encumbrances
on real property, or a foreign corporation authorized to do business in this state, may not issue
any policy, binder, or certificate unless it has secured from a person, firm, or corporation holding
a certificate of authority under chapter 43-01 the record title evidence of the title to be insured,
and the title evidence has been examined by a person duly admitted to the practice of law as
provided by chapter 27-11. The certificate of authority of any corporation violating this section
must be revoked as provided by chapter 26.1-02 or 26.1-11.
26.1-20-06. Judgment against corporation - Enforcement.
If a corporation fails to satisfy any judgment against it arising out of its liability under any title
insurance policy, issued, insured, or assumed by it, within thirty days after the finality of the
judgment becomes fixed, the judgment may be enforced against its guaranty fund deposit
through the following procedure:
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The judgment creditor shall petition the court wherein the judgment is entered and as
part of the same cause, truthfully setting forth the facts regarding the failure to satisfy
the judgment as required by this section.
Upon the petition the court shall direct the issuance of a special execution directed to
the sheriff of Burleigh County, requiring that the sheriff sell so much of the securities on
deposit as may be required to satisfy the judgment and pay the costs of the levy.
The special execution must be executed by the sheriff by delivering to the state
treasurer and to the commissioner a certified copy of the writ of execution together
with a certified copy of the judgment and of the petition and order, and within ten days
thereafter there must be delivered to the sheriff sufficient securities to satisfy the
judgment in full. The sheriff shall sell the securities upon execution as in the case of
sales of personal property upon execution generally.
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