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Basic Manual of Title Insurance, Section IV (continued)

Title Manual Main Index | Section IV Index

Includes Procedural Rules P-28 Effective 01/03/2014 | P-29 | P-30


P-28. Requirements for Continuing Education for Title Agents and Escrow Officers and Professional Training Program for Title Agent Management Personnel

A. Continuing Education Provisions

  1. Purpose and Scope. The purpose of this rule is to set forth procedures and requirements for certification of continuing education courses for title insurance agents licensed under Chapter 2651 of the Insurance Code and/or escrow officers licensed under Chapter 2652 of the Insurance Code, as authorized under §2651.204 and §2652.058 of the Insurance Code. This rule shall not apply to a corporate agent licensee.

  2. Definitions. The following words and terms, when used in this rule, shall have the following meanings, unless the context clearly indicates otherwise.

    1. Continuing Education Coordinator - The person in the Department who is delegated authority to review continuing education courses and licensee compliance and who may be addressed as follows: Texas Department of Insurance, Continuing Education Coordinator, Title Program, 333 Guadalupe Street, P.O. Box 149104, Austin, Texas 78714 -9104.

    2. Department - The Texas Department of Insurance.

    3. Licensee - Any individual person holding a license under the authority of Chapter 2651 and/or Chapter 2652 of the Insurance Code.

    4. Provider - A statewide title insurance association, statewide title agents' association or professional association, or a local chapter of a statewide title insurance or title agents' association or professional association; an accredited college or university; a career school or college as defined by the Education Code §132.001; the State Bar of Texas; an educational publisher; a title insurance company authorized to do business in the State of Texas; a company owning one or more title insurance companies authorized to do business in the State of Texas; a Texas public school system; or an individual appointed as an instructor by an entity or association described in this paragraph.

    5. Certified Transcript - A copy of the Provider's records issued by the Provider and certified by the custodian of the Provider's records to be a true and correct copy of the Provider's records evidencing completion of continuing education course(s).

    6. Control - Is the power to direct or cause the direction of the management and policies of a title agent, whether directly or indirectly. A person is considered to control a title agent structured as an entity, if the person, individually or acting with others, directly or indirectly:

      (1) holds the power or right to vote, owns, or controls, or holds proxies representing, at least 10 percent of the voting stock or voting rights of the entity;

      (2) or through any other right or power exercises rights in the management, direction, or conduct of the day to day operations of the title agent.
    7. Entity - Shall mean an entity registered with the Office of the Texas Secretary of State in accordance with the Texas Business Organizations Code. The term shall include only those organizational types authorized to engage in the business of title insurance in the State of Texas.

  3. Applicability of Requirements.

    1. Title insurance agents licensed under Chapter 2651 of the Insurance Code and escrow officers licensed under Chapter 2652 of the Insurance Code shall complete the required number of hours of continuing education set forth in subparagraph (c) below for each reporting period, unless otherwise exempt. Of the Total Required Hours, the specified number must be for accredited Ethics courses.

    2. The reporting period is from the issue date or last renewal date of the license to the expiration date.

    3. A Licensee subject to renewal shall complete continuing education on a prorated schedule for each reporting period. The number of required credit hours shall be based upon the reporting period from the issue date of the original license or the most recent renewal date: In accordance with the following schedule for all licenses renewing on or after September 31, 2013.

      LICENSE PERIOD Total Required HOURS Ethics
      Less than 4 months 0 0
      4 months up to and including 6 months 4 0
      7 months up to and including 9 months 5 0
      10 months up to and including 12 months 6 1
      13 months up to and including 15 months 7 1
      16 months up to and including 18 months 8 1
      19 months up to and including 21 months 9 1
      22 months or more 10 1
      (INCREMENTS ARE IN FULL MONTHS - DO NO COUNT PARTIAL MONTHS)
  4. Exemption From Continuing Education.

    1. The continuing education requirement shall not apply to title insurance agents and escrow officers who meet the criteria of illness, medical disability or circumstances beyond the control of the licensee.

    2. A licensee shall apply for an exemption from or an extension of time for meeting the continuing education requirements by completing an application form obtained from the Department and submitting all requested documents and information. The form must be received within the reporting period for which it applies and shall include at least the following:

      1. Statement of the exact nature of the illness, medical disability or other extenuating circumstances beyond the control of the licensee.

      2. Evidence in the form of medical reports from attending physician(s) and insurance claims regarding the illness or medical disability of the licensee, or evidence of insurance claims and/or other documentation as determined regarding circumstances beyond the control of the licensee.

      3. Assessment of the condition of the licensee whether it is temporary, permanent or unknown.

      4. Statement as to whether the licensee will or will not be able to perform activities including any acts of a title agent or escrow officer.

      5. Estimated date when the licensee will be able to perform any activities including any acts of a title agent or escrow officer in accordance with the medical reports or other documents pertaining to circumstances beyond the control of the licensee.

      6. Any other information that may be requested by the Department.

  5. Course Criteria.

    1. The purpose of continuing education is to increase the licensee's professional competence with regard to title insurance coverage which can be used to assist customers in making informed decisions regarding their title insurance needs.

    2. The course shall have a stated purpose that reflects the goal(s) or the overall intent of the course.

    3. The course shall have specific written learning objectives which support the achievement of the purpose statement of the course. The learning objectives are the desired outcomes for the learning process and identify the knowledge, skills, or attitudes the licensee is expected to obtain.

    4. The course shall have a method of evaluation which measures how effectively the course meets its objectives.

    5. Persons conducting a course should be knowledgeable and well versed on the topic(s) and be able to conduct/instruct a class and provide appropriate feedback on questions.

    6. The course content must be designed to increase the licensee's knowledge and understanding of one or more of the following: title insurance principles and coverages; applicable laws, land title search or examination; mortgage lending; closing transactions; rules and regulations promulgated by the commissioner; recent and prospective changes in coverages, law, regulations, and practices; management of the licensee's insurance business; ethical conduct; or duties and responsibilities of the title insurance agent or escrow officer.

    7. A State Bar of Texas course is acceptable as an approved course as long as the course includes material pertaining to the business of title insurance, real property, surveys, mortgage lending , ethical conduct or transfer of land titles.

    8. Courses to meet the Ethics requirement must be accredited by either the State Bar of Texas or the Department for Ethics Credit.

    9. Each course must be reviewed every two years by the provider and updated to remain relevant to the professional development of a licensee.

  6. Types of Courses. Continuing education courses shall consist of two types:

    1. Classroom Courses. This type of course includes any type of continuing educational activity that involves viewing or listening to live presentations or prerecorded media in which attendance may be in person, by electronic means or through such means as may be developed through advanced technology. This type of course must include a component that has a means to reasonably authenticate the student's identity and attendance. Classroom courses include any type of activity that is considered an 'Accredited CLE Activity' as that term is presently defined under the State Bar of Texas MCLE Regulations and Accreditation Standards.

    2. Self-study Courses. This type of course includes textbook, audio, video, computer based instruction, or any combination of these in an independent study setting with some measurement of completion of the objective of the course.

  7. Hours of Credit. Each provider must complete and submit a New Provider Application. The provider must complete and submit a Course Application for each course. Credit hours for continuing education courses are determined by the methods set forth in paragraphs (a) - (i) of this subsection.

    1. Credit for classroom courses is determined by the number of minutes of actual instruction time divided by 60. Actual instruction time is considered the amount of time devoted to the actual instruction/reading of the topic, and does not include breaks, lunch or dinner, introductions of speakers, instructions, etc. No more than 10 hours of credit shall be recognized for any one course.

    2. Credit for independent self-study courses shall be calculated by using a total of 2600 words as equal to one credit hour. Total words of a text divided by 2600 words will equal the course credit hours. No more than 4 hours of credit shall be recognized for any one course.

    3. Credit for applicable State Bar of Texas courses is determined by the number of credit hours approved by the State Bar of Texas, but only those hours which pertain to title insurance, real property, surveys, mortgage lending , ethical conduct or transfer of land titles. No more than 10 hours of credit shall be recognized for any one course. No self-study hours approved by the State Bar of Texas will be accepted.

    4. Credit for accredited college or university courses is determined by the number of semester hours approved for the course by the college or university, but only those hours which pertain to title insurance, real property, surveys, mortgage lending , ethical conduct or transfer of land titles. Each semester hour will be equal to 8 credit hours.

    5. Credit for title insurance agents or escrow officers who teach a qualified continuing education course or a portion of a course is determined by the number of hours of course instruction or by the number of hours assigned to the full course whichever is applicable plus the actual hours of preparation for teaching the course reported by the teacher to the provider. The provider of the course is responsible for issuing a letter of certification reflecting the number of credit hours of preparation and the number of credit hours that the individual taught.

    6. Credit for any course may be issued for less than the number of hours the course was assigned (i) to an instructor teaching a portion of the course who does not attend the full course and (ii) to a licensee for attending only a portion of the course. Providers must certify the actual number of hours taught or attended on the certificates of completion or the certified transcripts it issues to teachers or licensees.

    7. Credit for completing the same continuing education course more than once within the same reporting period shall not be granted for compliance with the continuing education requirement. Credit for teaching the same continuing education course more than once within a three-month period shall not be granted for compliance with the continuing education requirement.

    8. The licensee shall report to the Department on the license renewal form the course title or course number and the number of credit hours of certified continuing education courses claimed by the licensee for all license renewals.

    9. An approved provider may request that a certified course be assigned to another provider by completing and submitting a Course Assignment Agreement to the Department.

  8. Course Requirements for Successful Completion.

    1. Providers must use attendance rosters or an assessment measurement to certify completion of all or a portion of a classroom continuing education course. Attendance of at least 90% of the course is required to complete the entire course when using attendance rosters. Attendance of at least fifty-five (55) minutes of each hour claimed for a portion of a course is required for each hour of credit issued to a licensee attending only a portion of the course. A means to ensure that the licensee attended the full or at least 90% of the course or the requisite number of minutes for a portion of the course claimed for credit must be established.

    2. Providers must use a written examination to evaluate the licensee's competency and the effectiveness of the self-study courses. Written examinations shall meet the criteria set forth in paragraphs (1) - (7) of this subsection.

      1. Final examination questions shall not be the same or substantially the same questions the licensee previously encountered in the course materials or review exams.

      2. Security measures shall be in place to maintain the security and integrity of the examination and ensure that the enrolled licensee is the individual who took the examination.

      3. Answers to the examination shall not be given to the licensees at any time before, during or after the course.

      4. Examinations shall be graded by an authorized staff member.

      5. Licensees shall be allowed to retake an examination if a 70% passing score is not achieved. The retest shall consist of an alternate examination consisting of different questions from the original examination.

      6. Final examinations shall consist of three exams which are distributed alternatively to enrollees of the course, and are revised/updated every two years by the provider consistent with the course update/revision.

      7. The final examination shall be a comprehensive examination of the course and thoroughly test the licensee's knowledge of the content of the course.

    3. Providers must issue certificates of completion or a certified transcript to licensees who successfully complete all or a portion of a certified course. The certificate must be issued in a manner which will ensure that the person receiving the certificate is the licensee who took the course, be issued within a reasonable period of time, and be completed to reflect the date the licensee took the course/examination. Information on the certificate of completion can be duplicated from a form obtained from the Department. A certificate of completion or a certified transcript is valid to renew multiple licenses issued under Chapter 2651 or Chapter 2652 of the Insurance Code, if such completion occurred within the renewal period of each license.

  9. Course Certification.

    1. Providers of courses must certify each continuing education course with the Department prior to offering the course using a certification form obtained from the Department. All courses filed with the Department for certification shall be deemed approved unless the Continuing Education Coordinator notifies the provider of disapproval of certification within 30 days of the date on which the certification is filed.

    2. Courses from the State Bar of Texas must be certified with the Department to recognize the number of credit hours approved for the course.

    3. Providers must certify within 150 days from the effective date of this rule on a form obtained from the Department that each course offered for continuing education credit meets these requirements.

    4. Providers must notify the Department when a course is discontinued or no longer active, and when there is a change in the provider's name, address or telephone number in order for the Department to maintain an up-to-date registry of courses and to prepare, if courses are to be available to the public, a list of such courses upon request.

  10. Obtain Forms. Application forms for exemption, provider and course certification forms, certificate of completion forms, and the list of courses can be obtained from the Texas Department of Insurance, Continuing Education Coordinator, Title Licensing Program, 333 Guadalupe, P. O. Box 149104, Austin, Texas 78714-9104.

  11. Appeals. A decision of the Continuing Education Coordinator to deny an application for an exemption from or extension of time for meeting continuing education requirements or a decision disapproving certification of a continuing education course may be appealed to the Manager of the Title Licensing Program, who shall decide the appeal within 30 days following the filing of the appeal. The Manager's decision may be appealed to the Commissioner.

  12. Licensee Compliance.

    1. Licensees may choose courses from any of the courses approved for their type of license which are certified with the Department to meet their continuing education compliance requirements.

    2. Title insurance agents and escrow officers shall attach copies of completion certificates as part of the license renewal or submit a certified transcripts. Each licensee must maintain evidence of course completion for each course for the current and next preceding renewal period which generally consists of four years.

    3. Evidence of compliance is a certificate of completion or a certified transcript from a provider of the course which has been successfully completed.

  13. Audit of Continuing Education Records.

    1. All continuing education records and evidence of continuing education compliance of licensees must be maintained for a minimum period of four years and are subject to the review of the Department at any time. Accuracy of a licensee's records is subject to verification at any time.

    2. All continuing education records, course rosters, and all other course materials of providers must be maintained for at least four years and are subject to the review of the Department at any time.

    3. If continuing education records are audited or reviewed and the validity or completeness of same are questioned, the licensee or provider shall have 30 days to correct discrepancies or submit new documentation.

  14. Failure to Comply.

    1. Failure to comply with the continuing education requirements in the absence of a valid exemption, or falsification of records of compliance by the licensee is subject to disciplinary action after notice and hearing. Disciplinary action may include a fine, suspension, revocation or cancellation of license in accordance with the Insurance Code, Chapter 82 and any other applicable laws or statutes.

    2. Failure to comply with the rules or falsification of any records by the provider may subject the courses of the provider to be removed from the list of certified courses.

    3. Continuing education requirements must be completed by the licensee's renewal date. If continuing education requirements are not met by the renewal date, the license will not be renewed. The 90-day late renewal filing period cannot be used to complete continuing education requirements.

    Effective January 3, 2014 (Order 2806)

B. Provisions Pertaining to Professional Training Program for Title Agent Management Personnel

  1. Definition of Management Personnel - All personnel identified in an Application for Texas Title Insurance Agent's License (Form FINT143) as follows:

    1. Sole Proprietorship - Sole Proprietor and any individual(s) identified as designated manager(s)

    2. Partnership - Individual partners and any individual(s) identified as designated manager(s). If an entity is designated as a partner, then any as indicated in item (c) below.

    3. Entity - each officer, director, partner, manager, designated manager who will administer the entity's day to day operations in this state; each shareholder who is in control of or has the right or ability to control the entity; if a shareholder is an entity, each individual who is in control of the parent entity and who will administer the day to day operations of the parent entity in this state.

    4. For the purposes of this subsection the term "control" and "entity" shall be defined in accordance with Procedural Rule P-28 A.2.

  2. Notification to Department of Management Personnel In an Application for Texas Title Agent's License. A corporation or partnership shall file in the Application for Texas Title Insurance Agent's License (Form FINT143) biographical information for:

    1. each executive officer, director, or partner who will administer the entity's day to day operations in this state;

    2. each shareholder who is in control of the corporation or partner who has the right or ability to control the partnership; and

    3. if the corporation or partnership is owned, in whole or in part, by another entity, each individual who is in control of the parent entity, and who will administer the day to day operations of the parent entity in this state.

    4. For the purposes of this subsection the term "control" shall be defined in accordance with Procedural Rule P-28 A.2.

  3. Applicability of Requirements. Except as provided in subsection B.3 of this procedural rule, an individual who is designated in an Application for Texas Title Insurance Agent's License (Form FINT143) to hold a management position for the entity that is applying for the title agent license must complete a professional training course for title agent management personnel that meets the requirements of this procedural rule, within 12 months immediately preceding the date of filing of the license application. This subsection is applicable only to individuals designated in an application for a title agent license that is complete after September 31, 2013.

  4. Exemption from Professional Program. An individual is exempt from the professional training requirements of subsection B of this procedural rule if the individual has held in this state for at least five years a position as management personnel with a title insurance agent, or a comparable position.

  5. Standards for Professional Training Program for Title Agent Management Personnel. The course shall:

    1. be submitted to the Department for certification in compliance with subsection A.9 of this procedural rule (pertaining to Course Certification);

    2. be at least eight hours in length; and

    3. cover the subjects described in subsection B.8 of this procedural rule.

  6. Continuing Education Credit. Licensees may count a professional training course for title agent management personnel toward completion of the continuing education requirements prescribed in subsection A.3 of this procedural rule (pertaining to Applicably of Requirements).

  7. Proof of Course Completion. All individuals who are defined as management personnel in subsection B.1 of this procedural rule and not exempt under the provisions of subsection B.3 of this procedural rule shall maintain proof of completion of a professional training course for title agent management personnel for a period of four years from the date of completion of the course. Upon request, the individual shall provide proof of completion of the professional training course for title agent management personnel to the Department.

  8. Completion Certificate. A provider issued completion certificate or a certified transcript for a professional training course for title agent management personnel must comply with the requirements of subsection A.8 of this procedural rule (pertaining to Course Requirements for Successful Completion).

  9. Course Subjects. The subjects for a title agent management personnel professional training course outline must include topics that address:

    1. the basic principles and coverages related to title insurance;

    2. recent and prospective changes in those principles and coverages;

    3. applicable rules and laws;

    4. proper conduct, including ethical conduct, of the license holder's title insurance business;

    5. accounting principles and practices and financial responsibilities and practices relevant to title insurance; and

    6. the duties and responsibilities of a title insurance agent.

  10. Provider Requirements. Course providers must meet all of the requirements for providers set forth in Procedural Rule P-28 before offering a professional training course for title agent management personnel to licensees or management personnel.

    Effective January 3, 2014 (Order 2806)


Title Manual Main Index | Section IV Index

Procedural Rule P-29 has been repealed and the language has been reintroduced in P-20. C. 1.


Title Manual Main Index | Section IV Index

P-30. Guaranty Assessment Recoupment Charge

Whenever an assessment has been made by the Commissioner upon title insurance companies (the "Assessed Companies") pursuant to Section 7 of Article 9.48, Insurance Code, and the Board has promulgated a special additional charge of up to 1% of a subsequent year's premium rates, pursuant to Section 15 of Article 9.48, to permit the Assessed Companies to recoup a portion of such assessment, the special additional charge shall be collected, distributed and accounted for in the following manner:

  1. The special additional charge (hereinafter referred to as the "Guaranty Assessment Recoupment Charge" or "Recoupment Charge") shall be collected upon every title insurance policy, whether issued separately or simultaneously, and every other title insurance insuring form for which a premium is charged, including, but not limited to, endorsements and construction loan binders. It shall be collected directly from the persons paying the premiums for the policies and forms by all title insurance agents (including all insurers' direct operations and all title attorneys as defined in Section 2(d), Article 9.56, Insurance Code) and shall be remitted by such agents to the Texas Title Insurance Guaranty Association (the "Association") quarterly, along with the agent's remittance form, in accordance with the following schedule:

    1. those funds collected during the first calendar quarter shall be remitted on or before the next May 1;

    2. those funds collected during the second calendar quarter shall be remitted on or before the next August 1;

    3. those funds collected during the third calendar quarter shall be remitted on or before the next November 1; and,

    4. those funds collected during the fourth calendar quarter shall be remitted on or before the next February 1.

  2. This charge shall be disclosed as a separate itemized charge entitled "Guaranty Assessment Recoupment Charge" on the closing/settlement statement, or, if a closing/settlement statement is not used, on the billing for the endorsement, binder or other insuring form. The agent shall forthwith deposit all Recoupment Charge funds into an audited escrow or trust account, and, for that purpose, may use the same account into which it deposits the State of Texas Policy Guaranty Fees. The agent is responsible for the actual remittance of such funds to the Association, and must maintain an accurate record of the amount of Recoupment Charge funds it has collected, the amount it is holding on deposit and the amount it has remitted.

  3. Within thirty days after each of the dates mentioned in paragraph (1), above, the Association shall distribute to each Assessed Company that company's pro rata share of the Recoupment Charge funds so collected, according to the portion of the assessment that company has paid.

  4. The Association shall furnish to each Assessed Company during the month of January each year a written statement on Form T-G3 with respect to any assessment paid, or recouped through a Recoupment Charge, in whole or part, by such company within the preceding calendar year. In the event the Company has made payments or received Recoupment Charge funds with respect to more than one assessment during such year, the Association shall furnish a separate Form T-G3 pertaining to each assessment.

    Each Assessed Company may file the Association's statement(s) on Form T-G3 with the company's premium tax return, in support of its claiming the tax credits authorized by Section 15 of Article 9.48, Insurance Code.

Continue to P-31. Authorized Execution of Directly Issued Policy

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