SENATE BILL 376

47th legislature - STATE OF NEW MEXICO - first session, 2005

INTRODUCED BY

Carroll H. Leavell

AN ACT

RELATING TO TITLE INSURANCE; PROVIDING UNDERWRITING STANDARDS FOR TITLE INSURERS; PROVIDING PROCEDURES FOR ENFORCING REMEDIES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. Section 59A-30-11 NMSA 1978 (being Laws 1985, Chapter 28, Section 11, as amended) is amended to read:

     "59A-30-11. UNDERWRITING STANDARDS AND RECORD RETENTION.--

          [A. No title insurance policy may be written unless the title insurer or its title insurance agent has caused to be conducted a reasonable search and examination of the title using an abstract plant meeting the requirements of Section 59A-12-13 NMSA 1978 and has caused to be made a determination of insurability of title in accordance with sound underwriting practices. The duty to search and examine imposed by this section is solely for the purpose of enhancing the financial stability of title insurers for the benefit of insureds under title insurance policies. The New Mexico Title Insurance Law is not intended and should not be construed to create any duty to search and examine that runs to the benefit of, or to create any right or cause of action in favor of, any person other than a title insurer.]

          A. A title insurance policy may be issued only after the title has been searched using an abstract plant meeting the requirements of Section 59A-12-13 NMSA 1978 and after the title has been examined in accordance with sound underwriting practices. The search and examination required by this section are not intended to create duties owed to any person, other than the title insurer. The title insurer shall be liable under the policy for errors and mistakes made by the title insurance agent or an employee of the title insurer in the search and examination required by this section for claims covered by the policy.

          B. Evidence of the examination of title and determination of insurability shall be preserved and retained in the files of the title insurer or its title insurance agent for a period of not less than fifteen years after the title insurance policy has been issued. Instead of retaining the original evidence, the title insurer or title insurance agent may in the regular course of business establish a system whereby all or part of the evidence is recorded, copied or reproduced by any process that accurately and legibly reproduces or forms a durable medium for reproducing the contents of the original. This subsection shall not apply to:

                (1) a title insurer assuming liability through a contract of reinsurance; or

                (2) a title insurer acting as coinsurer if one of the other coinsuring title insurers has complied with this section."

     Section 2. A new section of the New Mexico Title Insurance Law is enacted to read:

     "[NEW MATERIAL] PROCEDURE FOR ENFORCING REMEDIES.--A person insured under a title insurance policy shall present any claim to the title insurer in accordance with the provisions of the title insurance policy form issued pursuant to the New Mexico Title Insurance Law and the rules promulgated by the superintendent."

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