The Texas Department of Insurance (TDI) is providing new guidance for the title industry on electronic signatures for escrow checks and directly issued policies that require countersignatures by bona fide officers or employees of the title insurance company.
The Business and Commerce Code Chapter 322, also known as the Uniform Electronic Transactions Act (UETA), provides that:
- Documents may be signed using an electronic signature.
- An electronic record complying with the UETA satisfies a law requiring a person to retain that record for an audit or similar purpose.
If a title agent or company executes documents, including checks, with electronic signatures, the agent must be able to show the electronically signed documents were signed by only those legally authorized to do so. This may be demonstrated through an audit of their electronic records and security procedures.
Electronic signatures for escrow checks
The Minimum Escrow Accounting Procedures and Internal Controls in Section V of the Basic Manual require two signatures on all escrow checks unless the title agent has four or fewer employees.
If the standards and requirements of the UETA are met, escrow checks may be signed electronically. Checks signed electronically must have two signatures, and one of the signatures must be from an escrow officer.
Bulletin B-0011-20, which allows a single signature, does not apply to electronic signatures, except for offices with four or fewer employees.
Directly issued policies
If the standards and requirements of the UETA are met, electronic signatures on directly issued policies meet the Procedural Rule P-31 requirement for original signatures.
If you have any questions, please contact TDI at TitleExaminations@tdi.texas.gov.