26-23-303. Definitions.

(a) As used in this article:

(i) "Alien title insurer" means any title insurer incorporated or organized under the laws of any foreign nation or any province or territory thereof;

(ii) "Applicant" means a person, whether or not a prospective insured, who applies to a title insurer or title agent for a title insurance policy and who, at the time of the application, is not a title agent;

(iii) "Approved attorney" means an attorney at law who is not an agent or employee of a title insurer and whose certification as to status of title a title insurer is willing to accept as the basis for issuance of its title insurance policy;

(iv) "Associate" means any:

(A) Business organized for profit in which a producer of title business is a director, officer, partner, employee or owner of five percent (5%) or more of the equity capital thereof;

(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 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; or

(F) Person with whom a producer of title business or any associate of such producer has any agreement, arrangement or understanding, or pursues any course of conduct, the purpose or substantial effect of which is to evade the provisions of this article.

(v) "Charge" means any fee billed by a title agent or title insurer or both for the performance of services, other than fees that fall within the definition of premium in paragraph (a)(xiv) of this section and includes but is not limited to fees for document preparation, fees for the handling of escrows, settlements or closings and fees for services commenced but not completed. "Charge" does not include fees collected by a title insurer or title agent in an escrow, settlement or closing when the fees are limited to the amount billed for services rendered by an entity independent of the title insurer or title agent;

(vi) "Controlled business" means any portion of a title insurer's or title agent's business of title insurance in this state, referred to it by any producer of title business or by any associate of such producer, if the producer of title business, the associate, or both, have a financial interest in the title insurer or title agent to which business is referred;

(vii) "Domestic title insurer" means a title insurer organized under the laws of this state;

(viii) "Escrow, settlement or closing fee" means the consideration for supervising the actual execution, delivery or recording of transfer and lien documents and for disbursing funds;

(ix) "Financial interest" means any interest that entitles the holder in any manner to five percent (5%) or more of the net profits or net worth of the entity in which the interest is held;

(x) "Foreign title insurer" means any title insurer organized under the laws of any other state of the United States, the District of Columbia or any other jurisdiction of the United States;

(xi) "Gross operating revenue" means all premiums received by a title insurer or title agent;

(xii) "Net retained liability" means the total liability retained by a title insurer for a single risk, after taking into account the deduction for ceded liability, if any;

(xiii) "Person" means any natural person, partnership, association, cooperative, corporation, trust or other legal entity;

(xiv) "Premium" means fees for:

(A) Issuing a title insurance policy, including any service charge administration fee for the issuance of a title insurance policy;

(B) Abstracting, searching and examining title when conducted or performed in contemplation of or in conjunction with the issuance of a title insurance policy;

(C) Preparing or issuing preliminary reports, property profiles, commitments, binders or like products;

(D) Assuming liability under a contract of reinsurance.

(xv) "Producer of title business" or "producer" means any person, including any officer, director or owner of five percent (5%) or more of the equity or capital of any person engaged in this state in the trade, business, occupation or profession of:

(A) Buying or selling interests in real property;

(B) Making loans secured by interests in real property; or

(C) Acting as broker, agent, representative or attorney of a person who buys or sells any interest in real property or who lends or borrows money with such interest as security.

(xvi) "Refer" means to direct or cause to be directed or to exercise 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;

(xvii) "Report", subject to the stated exceptions set forth therein, issued prior to the issuance of a policy, means a "preliminary report", "commitment", or "binder" and constitutes a statement of the terms and conditions upon which the insurer is willing to issue its policy but is not a title policy. Neither a title policy nor a report issued prior to the issuance of a title insurance policy is an abstract of title;

(xviii) "Single risk" means the insured amount of any title insurance policy, except that if two (2) or more title insurance policies are issued simultaneously covering different estates in the same real property, "single risk" means the sum of the insured amounts of all such title insurance policies. Any title insurance policy insuring a mortgage interest a claim payment under which reduces the insured amount of a fee or leasehold title insurance policy shall be excluded in computing the amount of a single risk to the extent that the insured amount of the mortgagee title insurance policy does not exceed the insured amount of the fee or leasehold title insurance policy;

(xix) "Title agent" or "agent" means any person authorized in writing by a title insurer to do any of the following but does not include approved attorneys, officers or employees of a title insurer:

(A) Solicit title insurance business;

(B) Collect premiums;

(C) Determine insurability in accordance with underwriting rules and standards prescribed by the title insurer; or

(D) Issue policies of the title insurer.

(xx) "Title insurance business" or "business of title insurance" means:

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

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

(I) Soliciting or negotiating the issuance of a title insurance policy;

(II) Guaranteeing, warranting or otherwise insuring the correctness of title searches;

(III) Handling of escrows, settlements or closings;

(IV) Execution of title insurance policies;

(V) Effecting contracts of reinsurance;

(VI) Abstracting, searching or examining titles; or

(VII) Doing or proposing to do any business in substance equivalent to any of the businesses specified in subdivisions (I) through (VI) of this subparagraph in a manner designed to evade the provisions of this article.

(xxi) "Title insurance policy" or "policy" means a contract wherein, subject to the stated terms and conditions, a title insurer insures, guarantees or indemnifies owners of real or personal property or the holders of liens or encumbrances thereon or others interested therein against loss or damage suffered by reason of:

(A) Defects in, adverse claims, liens or encumbrances in the title to the stated property;

(B) Unmarketability of the title to the stated property;

(C) Guaranteeing, warranting or otherwise insuring by a title insurance company the correctness of searches relating to the title to property;

(D) Defects in the authorization, execution or delivery of an encumbrance upon such property;

(E) The insuring by a title insurance company the validity and enforceability of evidences of indebtedness secured by an encumbrance upon the title or interest in such property;

(F) The invalidity, unenforceability or loss of priority of an insured mortgage resulting from a change in rate of interest or principal balance, or both, which change is in accordance with the provisions of the insured mortgage.

(xxii) "Title insurer" or "insurer" means a company organized under laws of this state for the purpose of transacting as insurer the business of title insurance and any foreign or alien title insurer engaged in this state in the business of title insurance as insurer;

(xxiii) "Title plant" means a set of records in which an entry has been made of documents or matters imparting constructive notice under the law of matters affecting title to real property or any interest therein or encumbrance thereon, which have been filed or recorded in the jurisdiction for which the title plant is maintained.