Regulation of Title Insurance
Formation of a title insurance company
Companies that are formed “for the purposes of abstracting title to real estate, furnishing information in relation thereto, and insuring owners and others interested therein against loss by reason of encumbrances and defective titles,” must obtain a certificate (i.e., license) from the Mississippi Insurance Department. Miss. Code Ann. §83-15-1. Once licensed, these companies must file an annual statement of its condition with the Department. Id. Subject to filing the annual statement, the Department will issue an annual license to the title insurance company. Miss. Code Ann. §83-15-3.
In order to issue title insurance policies, title insurance companies must comply with certain minimum capital and surplus thresholds. Miss. Code Ann. §83-15-5. The total amount of any policy issued by such a company without reinsurance may not exceed fifty percent (50%) of the capital and surplus of the company, as reflected by its latest statement to the commissioner. Id. In addition, title insurance companies must establish and maintain a “reserve for losses” in an amount not less than the lesser of ten percent of the amount of all premiums received or fifty thousand dollars. Miss. Code Ann. §83-15-7. Finally, title insurance companies must establish and maintain a “reserve for unearned premiums.” Miss. Code Ann. §83-15-9.
Appointment of individual or entity agents
Coverage (e.g., title insurance) protecting an insured against risk resulting from defective titles or invalidity or adverse claim to title is considered “limited line insurance.” Miss. Code Ann. § 83-17-53. In order to “sell, solicit or negotiate” title insurance, one must be appropriately licensed for that line of authority. Miss. Code Ann. § 83-17-55.
An “insurance producer” cannot act as an agent of an insurer unless the producer is an appointed agent of the insurer. Miss. Code Ann. § 83-17-75. For an individual to become a licensed title insurance agent, or “producer,” he must file a Limited Lines Insurance Producer license application with the Mississippi Insurance Department. However, attorneys licensed in Mississippi are not required to file a licensing application and are not required to pay licensing or renewal fees. Miss. Code Ann. § 83-15-3. For non-attorney agents (i.e., law firms and non-Mississippi licensed attorneys), the licensing fee is $100 and renewal fees are $100. Licenses must be renewed on a biennial basis and will expire on the last day of the licensee’s birth month. Both the applications and renewals can be submitted online.
Once the license application is submitted, the insurer then submits a notice of appointment with the Department.
In order to license an entity (e.g., a law firm), a separate application must be filed after the individual license application is filed and approved and the title insurer appoints the agent as a producer. As part of the application, the entity will be required to designate a Mississippi-licensed producer responsible for the entity’s compliance with Mississippi insurance laws. The entity will be authorized to produce title insurance if the designated responsible producer is licensed to produce title insurance. Entities with multiple locations are not required to obtain multiple licenses. Entity licenses expire biannually on May 31 and may be renewed online within 67 days prior to expiration. Both the applications and renewals can be submitted online.
More instructions and information on licensing can be found on the Department’s website. The licensing updates and frequently asked questions link may also be helpful.