§512. Definitions

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

(1)(a) "Abstract " shall mean a written history, synopsis, or summary of the recorded instruments in the public records affecting the title to immovable property that: (i) is prepared and certified by the abstractor in accordance with the minimum search periods and requirements of a title opinion as set forth in Paragraph (17) of this Section; (ii) includes a photocopy or electronic copy of such recorded instruments, or extracts of such recorded instruments prepared by the abstractor who personally reviewed such recorded instruments; and (iii) is dated and signed by the abstractor and presented to an attorney duly licensed and authorized to practice law in Louisiana, as set forth in Paragraph (17) of this Section and R.S. 37:212, for examination.

(b) For the purpose of this Paragraph, "public records" shall mean all instruments, including actual attachments thereto, which are recorded in the mortgage and conveyance records maintained by the clerk of court of the parish in which the property is situated, and the ad valorem property tax records for the parish and political subdivision in which the property is situated.

(c) Nothing in this Section prohibits any attorney duly licensed and authorized to practice law in Louisiana from personally reviewing and examining the public records in order to certify or give an opinion as to the title to 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 producer, 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 producer.

(7) "Escrow account" shall mean the demand deposit account maintained by a title insurer or title insurance producer at a qualified financial institution into which the insurer or producer 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 producer 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 producer 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 producer" or "producer" 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 the public records or a personal examination of an abstract. Such examinations shall be conducted and title opinion rendered only by an attorney duly licensed and authorized to practice law in Louisiana as provided in R.S. 37:212. 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. For federal judgments, a search of the mortgage records shall be made for a period of twenty years. However, such time period requirement shall not apply to any transaction made prior to and on January 1, 2013, by the Road Home Corporation, The Louisiana Land Trust, or any political subdivision, of property originally acquired in connection with the Road Home Program.

(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. If the transaction being insured is a sale, the minimum search period shall be thirty years, or longer, if necessary, in order to reach an arms-length sale between unrelated, third parties. If only a mortgage is being insured, then the search shall be for a minimum of ten years or two links in the chain of title, whichever is greater. However, such minimum search periods for a sale or mortgage shall not apply to any transaction made prior to and on January 1, 2013, by the Road Home Corporation, The Louisiana Land Trust, or any political subdivision, of property originally acquired in connection with the Road Home Program.

(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 Subpart.

(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; Redesignated from R.S. 22:2092.2 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 503, §1; Acts 2010, No. 1028, §1; Acts 2011, No. 325, §1, eff. Jan. 1, 2012.