SB210 Alabama 2011 Session

Summary

Primary Sponsor

J.T. WaggonerSenator

Republican

Session

Regular Session 2011

Title

Title insurers, closing or settlement insurance for settlement agents, issuance authorized, Sec. 27-3-6.1 added

Summary

SB210 would allow title insurers to issue closing or settlement protection with approved forms, set fees, and require buyer notice about its availability.

What This Bill Does

The bill lets title insurers provide closing or settlement protection to parties in real estate transactions where a title policy will be issued and requires the forms to be approved by the Commissioner of Insurance. It sets minimum fees for providing protection (with different amounts for buyers/lenders vs. sellers) and requires the purchaser to be informed about the option to purchase protection. The protection covers specific losses from theft or misappropriation of funds or failure to follow closing instructions by approved settlement agents, only as they relate to title status or mortgage lien issues, and it restricts other types of coverage; it also requires a notice process and allows a cure if notice was not obtained before closing.

Who It Affects

• Real estate purchasers and lenders/sellers involved in property transactions would have access to optional closing protection and would pay the specified fees, plus receive required notices about availability.
• Title insurers and settlement agents (including title agents) would be subject to new rules, including form approval, fee standards, notice requirements, and defined coverage limits.

Key Provisions

• Allows a title insurer to issue closing or settlement protection to a party in a real estate transaction where a title policy will be issued.
• Requires the protection form to be approved by the Commissioner of Insurance and defines the scope of coverage (theft or misappropriation of settlement funds and failure to follow written closing instructions) only to the extent it relates to title status or mortgage lien issues.
• Sets minimum fees: at least $25 per party receiving protection for buyers/lenders; at least $50 for sellers or owner financing when no loan policy is issued.
• Requires a written notice to purchasers about the availability of closing protection, including property description, fee disclosure, option to acquire or decline, date, and signatures.
• Allows cure of missing notice by sending a certified letter before any claim is made.
• Prohibits providing any other coverage that indemnifies against improper acts of settlement services beyond closing protection.
• Effective immediately after governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Insurance