§ 58-26-1. Purpose of organization; formation; insuring closing services; premium rates; combined premiums for lenders' coverages. - North Carolina Statutes

Article 26.

Real Estate TitleInsurance Companies.

§ 58‑26‑1. Purpose of organization; formation; insuring closing services; premium rates;combined premiums for lenders' coverages.

(a)        Companies may beformed in the manner provided in this Article for the purpose of furnishinginformation in relation to titles to real estate and of insuring owners andothers interested therein against loss by reason of encumbrances and defectivetitle; provided, however, that no such information shall be so furnished nor shallsuch insurance be so issued as to North Carolina real property unless and untilthe title insurance company has obtained the opinion of an attorney, licensedto practice law in North Carolina and not an employee or agent of the company,who has conducted or caused to be conducted under the attorney's directsupervision a reasonable examination of the title. The company shall cause tobe made a determination of insurability of title in accordance with soundunderwriting practices for title insurance companies. A company may also insurethe proper performance of services necessary to conduct a real estate closingperformed by an approved attorney licensed to practice in North Carolina.Provided, however, nothing in this section shall be construed to prohibit orpreclude a title insurance company from insuring proper performance by itsissuing agents.

(b)        Repealed by SessionLaws 2002‑187, s. 7.1.

(b1)      Domestic and foreigntitle insurance companies are subject to the same capital, surplus, andinvestment requirements that govern the formation and operation of domesticstock casualty companies. Domestic title insurance companies are subject to thesame deposit requirements that govern the operation of other domestic casualtycompanies in this State. Foreign or alien title insurance companies are subjectto an initial deposit pursuant to G.S. 58‑26‑31(b), based on theforecasted statutory premium reserve and the supplemental reserve for the firstfull year of operation in this State, but not less than two hundred thousanddollars ($200,000).

(c)        This Article shallnot be interpreted so as to imply the repeal or amendment of any of theprovisions of Chapter 84 of the General Statutes of North Carolina nor of anyother provisions of common law or statutory law governing the practice of law.

(d)        The premium ratescharged for insuring against loss by reason of encumbrances and defective titleand for insuring real estate closing services shall be based on the purchaseprice of the real estate being conveyed or the loan amount and shall not beestablished as flat fees. If a title insurer has also issued title insuranceprotecting a lender or owner against loss by reason of encumbrances anddefective title, the insurer shall charge one undivided premium for the combinationof the title insurance and the closing services insurance.

(e)        If the premiumstated upon a policy of title insurance has been understated or overstated dueto inadvertence, mistake, or miscalculation of the closing attorney or hisemployees, and the incident is not purposeful or part of a pattern, theCommissioner of Insurance shall not be required to impose a civil penalty orother sanction for the inadvertence, mistake, or miscalculation. (1899, c. 54, s. 38; 1901, c.391, s. 3; Rev., s. 4745; C.S., s. 6395; 1923, c. 71; 1973, c. 128; 1985, c.666, s. 43; 1987, c. 625, ss. 1‑3; 1993, c. 129, s. 1; c. 504, s. 15;2002‑187, ss. 7.1, 7.2.)