Illinois Regulator Delays Implementation of New Financial Interest Disclosure Until June 1
May 10, 2018
Due to efforts by the Illinois Land Title Association (ILTA), the Illinois Department of Financial and Professional Regulation (IDFPR) agreed to delay implementation of a new disclosure of financial interest form until June 1.
The IDFPR said the old disclosure form could be used at this time. Originally, the IDFPR released a memorandum on April 3 that indicated the new form was to be implemented on April 4.
The Illinois Land Title Association (ILTA) had asked IDFPR for the delay so the industry could work with the regulator to get additional clarification about the form and help its members comply.
The IDFPR said the purpose of the form is to inform the parties purchasing title insurance products and services (i.e. sellers and buyers) that:
- the parties have a right to choose who provides title insurance products and services
- other consumer protection information is provided
- the producers of title business or associate of producers of title business, title insurers and title agents are made known to them
- the insurer and agent have made an affirmative statement of how much money the agent will make on the transaction
- the costs of the title products and services are disclosed
The form requires signatures from the agent and underwriter to disclose estimated compensation the agent will receive for statutorily authorized services that are performed. The statement attests that nothing else of value has been exchanged and there has been no violation of the Illinois Title Insurance Act or the Real Estate Settlement Procedures Act.
The ILTA contends that several aspects of the new form exceed the scope of IDFPR’s authority. The Illinois Title Insurance Act permits the department’s secretary to adopt a form that requires only two disclosures by title business producers:
- the financial interest of the producer of title business or associate referring the title business
- a disclosure of an estimate of those charges to be paid as described in Section 19.
The ILTA said that because the act does not impose this disclosure requirement on underwriters or agents, the secretary cannot compel them to make the disclosures or sign the form.
Contact ALTA at 202-296-3671 or [email protected].