The Dodd Frank Wall Street Reform and Consumer Protection Act was signed into law on July 21, 2010, in response to the financial crisis of 2008 – 2009. As part of the act, the Consumer Financial Protection Bureau (CFPB) was created. Among other things, the CFPB held mortgage lenders responsible for their third party vendors, such as title companies.

In response, the title industry, working through its national trade organization, The American Land Title Association (ALTA) proposed a series of “best practices” to be adopted by members: ALTA Best Practices The intent was that the mortgage companies could be confident that those title agents who adopted and adhered to these best practices had taken responsible steps to protect their clients personal non-public information, and had adopted policies, procedures, and standards to treat clients in a professional, ethical, and timely manner.

In 2014 Veritas Title Partners approved the adoption and implementation of the American Land Title Association’s ALTA Title Insurance and Settlement Company Best Practices. A copy of which can be viewed at: ALTA Title Insurance and Settlement Company Best Practices Please note that Veritas Title Partners intent is to closely follow the ALTA’s Best Practices recommendations.

Veritas Title Partners Best Practices are broken down into seven pillars:
Veritas Title Partners Best Practices Policies

Best Practice 1 – Licensing: Establish and maintain current license(s) as required by the applicable licensing bodies to conduct the business of title insurance and settlement services. The purpose is to ensure that the company is fully compliant with all applicable laws and regulations.

I. Title Insurance Agent License Required

• A. Texas Law:
• A – 1 Texas Insurance Code – Title 11 – Sec. 2651.001. LICENSE AND BOND OR DEPOSIT REQUIRED.
  • (a) An individual, firm, association, or corporation may not act in this state as a title insurance agent for a title insurance company unless the individual or entity:
    1. holds a license as an agent issued by the department; and
    2. maintains a surety bond or deposit required under Subchapter C (see A-2, below).
  • (b) A title insurance company may not allow or permit an individual, firm, association, or corporation to act as its agent in this state unless the individual or entity complies with this section.
  A – 2 Texas Insurance Code – Title 11 – Sec. 2651.101. BOND REQUIRED.
  • (a) Each licensed title insurance agent and direct operation shall make, file, and pay for a surety bond payable to the department and issued by a corporate surety company authorized to write surety bonds in this state. The bond shall obligate the principal and surety to pay for any pecuniary loss sustained by:
    1. any participant in an insured real property transaction through an act of fraud, dishonesty, theft, embezzlement, or wilful misapplication by a title insurance agent or direct operation; or
    2. the department as a result of any administrative expense incurred in a receivership of a title insurance agent or direct operation.
  • (b) The amount of the bond must be the greater of:
    1. $10,000; or
    2. an amount equal to 10 percent of the gross premium written by the title insurance agent or direct operation in accordance with the latest statistical report to the department but not to exceed $100,000.
• B. Proof of Compliance with Texas Law:
  1. A copy of our current Agency License, issued by the Texas Department of Insurance, is attached hereto; and
  2. A copy of our Surety Bond is attached hereto.

II. Title Insurance Escrow Officer License Required

• A. Texas Law:
• A – 1 Texas Insurance Code – Title 11 – Sec. 2652.001. LICENSE AND BOND OR DEPOSIT REQUIRED.
• An individual may not act as an escrow officer unless the individual:
  1. holds a license issued by the department; and
  2. maintains a surety bond or deposit required under Subchapter C.
• A – 2 Texas Insurance Code – Title 11 – Sec. 2652.101. BOND REQUIRED. (a) A title insurance agent or direct operation shall obtain, at its own expense, a bond for its escrow officers payable to the department. The bond shall obligate the principal and surety to pay for any pecuniary loss sustained by the title insurance agent or direct operation through an act of fraud, dishonesty, forgery, theft, embezzlement, or willful misapplication by an escrow officer, either directly and alone, or in conspiracy with another person.
  • (b) The bond must be:
    1. of a type approved by the department; and
    2. issued by a surety licensed by the department to do business in this state.
• B. Proof of Compliance with Texas Law:
  1. A spreadsheet that lists each of our licensed escrow officers is maintained by the agent, reviewed monthly and available upon request; and
  2. A copy of each licensed Escrow Officer’s required Surety Bond is reviewed monthly and available upon request; and
  3. A list of currently licensed escrow officers in the State of Texas can be found on the Texas Department of Insurance website at the following link: http://www.tdi.texas.gov/title/index.html.
• C. Because it is imperative that each license required by the Laws of the State of Texas are promptly obtained and maintained, the responsibility for keeping track of the licenses and any required renewal thereof has been assigned to
  • Michael A. Knudsen, Compliance Officer.
  • Michael A. Knudsen
  • 11 Greenway Plaza, Suite 3170
  • Houston, TX 77046
  • Direct: 713.482.2801
  • mknudsen@veritastitlepartners.com
  In order to document that all required licenses have been obtained and are up-to-date, Michael A. Knudsen is required to:
  1. Create a file, notebook or spreadsheet of licenses;
  2. Verify license status using Department of Insurance website (which can be found at:
  3. http://www.tdi.texas.gov/title/index.html
  4. Review monthly for expiration dates and Department of Insurance website accuracy; and
  5. Notify the Department of Insurance when a licensee is no longer employed by our company, and surrender the license promptly to the Department of Insurance.

Best Practice 2 – Escrow Account Controls: Adopt and maintain appropriate written procedures and controls for Escrow Trust Accounts allowing for electronic verification of reconciliation. These controls help meet client and legal requirements for safeguarding client funds. Purpose: Appropriate and effective escrow controls and staff training help title and settlement companies meet client and legal requirements for the safeguarding of client funds. These procedures ensure accuracy and minimize the exposure to loss of client funds. Escrow Account Controls Procedures Current procedures that meet or exceed this best practice. These Minimum Controls are taken from the list of MINIMUM ESCROW ACCOUNTING PROCEDURES AND INTERNAL CONTROLS, which are found in the TDI Basic Manual:

1. A monthly escrow trial balance, which lists all open escrow balances for each individual escrow bank account, is prepared. Each month’s escrow trial balance is completed no later than the end of the next month.
2. A three-way reconciliation of bank balance, book balance and escrow trial balance for each individual escrow bank account is performed monthly. Each three-way reconciliation is completed within forty-five (45) days from the closing date of the bank statement of the account. The controller will perform these three-way reconciliations using RamQuest software as soon as statements are available, generally by the 15th of the following month.
3. Each reconciliation is approved by a manager or supervisor, Michael A. Knudsen, Chief Financial Officer.
4. Each reconciliation is prepared by someone not associated with the receipt and disbursement function.
5. Two signatures are required on all escrow checks. One signature is that of a licensed escrow officer.
6. Company records include copies of all checks, deposit slips, and receipt items.
7. Interest-bearing (investment) escrow accounts meet the following criteria:
   • The investment account must be styled in the name of the owner/beneficiary of the escrow funds, with the escrow agent named as trustee or escrow agent.
   • The escrow agent maintains written instructions from the owner/beneficiary of the escrow funds to open an investment account. Such written instructions are maintained in the escrow agent’s records.
   • The Tax Identification number used to open the interest-bearing escrow account is that of the owner/beneficiary of the funds, not that of the escrow agent.
   • The interest-bearing escrow account is included in a control ledger or record identifying all interest-bearing accounts. The interest is posted within seven business days after receipt of the statement or other documentation reporting the interest accrued.
8. Each guaranty file is assigned a unique number. Veritas Title’s numbering system includes the first two numbers representing the year the file was opened, the third and fourth number represent the office where the escrow file was opened, and the final four numbers represent the sequential number of the guaranty file.
9. All bank accounts are styled as “Escrow” or “Trust”. “Escrow account” or “trust account” appears on all bank statements, on the signed bank agreement, on disbursement checks and on deposit tickets.
10. Accounts open for longer than six months are thoroughly investigated. Disbursements from these accounts are not allowed without management approval. Dormant accounts (accounts with balances older than six months) are investigated by the controller and the escrow officer assigned to the guaranty file. Multiple attempts are made to distribute dormant funds. Dormant accounts with balances longer than three years are escheated in accordance with state law.
11. The signature blocks are removed by cutting off the lower right corner of the check from voided checks or otherwise rendered ineffective.
12. Management approval is required for any transfers of funds between guaranty files or escrow accounts and transfers between guaranty files must be documented in both files.
13. If after the escrow agent has received and deposited an earnest money check, and the check is returned to the escrow agent by a financial institution due to insufficient funds, the escrow agent notifies the seller by phone call and written notice deposited in the mail and addressed to the seller’s address as shown in the escrow agent’s file relating to the transaction within seven business days after the returned check is received by the escrow agent unless the check is replaced by collected funds within the seven-day time period. The escrow agent retains copies of written notices.
14. All escrow checks and deposit tickets display related guaranty file numbers directly on the document to provide a clear and direct connection between the document and related guaranty file.
15. Each guaranty file contains a complete, current disbursement sheet which lists the date, source and type of all receipts; date, check number, item description, payee and amount of all checks; date, amount and type of any other disbursements (i.e.: outgoing wire-transfers) and any remaining balance. Voided checks which have been canceled where funds have been credited back to the account are shown on the disbursement sheet.
16. Invoices substantiating or sufficient evidence to support all disbursements are matched up to the disbursements and maintained in the guaranty files.
17. Reimbursement of all escrow receivables and other escrow shortages are made by the appropriate party(ies) or from the escrow agent’s operating account as soon as possible but not later than forty-five (45) days from the closing date of the bank statement of the account which reflects therein the transaction(s) creating the escrow receivable(s) or shortage(s).
18. If a settlement statement requires changes, a new statement is prepared or pen-and-ink changes are initialed by all parties affected by the changes, or sufficient evidence to support the changes is maintained in the guaranty file. A copy of the revised, final settlement statement is provided to the lender and borrower.
19. A signed, pre-numbered receipt is issued for any escrow funds received in cash.
20. Copies of all checks are available in agency records, and must meet the following criteria:
    • The copies of the checks are clearly legible;
    • There are 2 copies of both sides of every check so that endorsements can be verified; and
    • It is unmistakable which front and back images belong together.
21. All escrow or trust accounts maintained by the agent are in financial institutions or branches of financial institutions located within the geographic bounds of the State of Texas, in compliance with state regulations.
22. If an escrow agent as defined herein detects a defalcation regarding its trust or escrow funds, the agent will file the following notice with the Title Division Examinations Section of the Department in accordance with Texas Department of Insurance regulations, within forty-five (45) days of the end of the month in which the defalcation is believed to have occurred:
    “We have detected circumstances regarding our escrow or trust funds that may warrant an investigation by the Title Division of the Department. The amount of funds involved is believed to be $_________.” If the agent comes into possession of an indictment or conviction concerning the defalcation, a copy of that document should be forwarded to the Department within 10 business days of the date the agent comes into possession of same. No defalcation or indictment has ever been detected or issued against the agent.
23. The company uses positive pay and ACH block on all escrow accounts to safeguard escrow funds. All checks when issued on an escrow account are reported to the bank on which they are drawn. Only those checks reported are cleared by the bank. All ACH transactions are blocked on escrow accounts.
24. Certain types of transactions are conducted by authorized employees only.
    • Only those employees whose authority has been defined to authorize bank transactions may do so.
    • Appropriate authorization levels are set by the company and reviewed for updates annually.
    • Former employees are immediately deleted as listed signatories on all bank accounts.
25. The agent segregates duties to make it difficult for someone to both create and approve/sign their own checks. Accounts are reconciled by the controller who has no signature authority to minimize the ability to tamper with the reconciliation process.
26. Outstanding file balances are documented. Files with balances older than six months are investigated and if funds are held under an escrow agreement, a copy of the escrow agreement is maintained with the accounting files and escrow/GF file.
27. Trial Balances for escrow trust accounts are reviewed at least three times during the current month to detect, investigate and resolve any negative balances.
28. When hiring employees, the agent performs credit and background checks. The goal is to avoid people who are in financial difficulty and may be tempted to illegally access our escrow account funds. Credit checks are run annually, while background checks (public records, arrest records) are run every three years – see below.
29. At least every three years, the agent obtains Background Checks going back five years for all employees who have access to customer funds.
30. In accordance with Texas Department of Insurance regulations the agent conducts ongoing training for employees in proper management of escrow funds and escrow accounting.
31. In accordance with Texas Department of Insurance regulations an annual audit of escrow funds is performed by the accounting firm of Ed Hill and Company, CPAs, LLC. The audit report is sent to the Texas Department of Insurance and each of the agent’s underwriters. Additionally each underwriter performs an annual audit of escrow accounts resulting in an additional 3 escrow audits each year.

Best Practice 3 – Information and Data Privacy: Adopt and maintain a written privacy and information security plan to protect non-public personal Information as required by local, state and federal law.
Purpose: Federal and state laws (including the Gramm-Leach-Bliley Act) require title companies to develop a written information security program that describes their procedures to protect non-public customer information. The program must be appropriate to the company’s size and complexity, the nature and scope of the company’s activities, and the sensitivity of the customer information the company handles. A company evaluates and adjusts its program in light of relevant circumstances, including changes in the firm’s business or operations, or the results of security testing and monitoring.
The agent has adopted the following procedures to comply with this requirement:

1. Physical security of non-public personal information.
   • The agent has adopted a written data security policy which is attached hereto.
   • The agent restricts access to non-public personal Information to authorized employees who have undergone background checks and credit reports at hiring.
   • Prohibits or controls the use of removable media.
   • Use only secure delivery methods when transmitting non-public personal information. The agent utilizes RPost and ShareFile for secure email.
2. Network security of non-public personal information.
   • The agent maintains secure access to company information technology.
   • Has developed guidelines for the appropriate use of company information technology.
   • Ensures secure collection and transmission of non-public personal information. The company has implemented a technology acceptable use policy.
3. Ensure disposal of non-public personal information.
   • In accordance with Federal law the company that possesses non-public personal information for a business purpose and disposes of such information properly in a manner that protects against unauthorized access to or use of the information.
4. The agent has established a disaster management plan, that is available upon written request.
5. Implemented appropriate management and training of employees to ensure compliance with company’s information security program.
6. Conducts appropriate oversight of service providers to ensure compliance with a company’s information security program.
7. Conducts audit and oversight procedures to ensure compliance with company’s information security program.
8. Notification of security breaches to customers and law enforcement.
9. Other:
   • Our lobby is separated by a door, receptionist or other controllable portal from our closing rooms and any office work rooms in all of our locations, including our Corporate/ Commercial office, Residential Elite office, and our Woodlands office.
   • Our server is isolated in a locked closet, in our locked workroom that is only accessible to those with security clearance.
   • Vendors, such as janitorial services, water and coffee suppliers, etc. that have access to areas that have private/confidential information are escorted by company personnel that are bonded or have undergone background checks and credit checks.
   • Employees that are able to download data using removable media devices have undergone criminal background checks and comply with the restrictions set by our company’s Data Security Policy.

Veritas Title Partners Data Security Policy Veritas Title Partners Privacy Policy

Best Practice 4 – Settlement Policies and Procedures: Adopt standard real estate settlement policies and procedures. This can ensure a settlement company can provide a safe and compliant settlement and meet state, federal and contractual obligations governing the settlement process and provide for ongoing employee training. Purpose: Adopting appropriate policies and conducting ongoing employee training can ensure that a real estate settlement company can meet state, federal and contractual obligations governing the settlement process and provide a safe and compliant settlement. WRITTEN POLICY FOR SETTLEMENT POLICIES & PROCEDURES

1. We acknowledge that Lenders expect full disclosure of all receipts and disbursements in accordance with written mutual instructions.
2. All sets of Closing Instructions are collected and reviewed prior to closing.
3. If any one set of Closing Instructions is adverse to another set of closing instructions – we obtain in writing from all parties consent to the changes made to correct the adverse matters prior to closing.
4. The closing is performed in accordance to all instructions from:
   • a) Lender Closing Instructions
   • b) Title Commitment
   • c) Purchase Agreement
   • d) Any other misc. agreements (Escrow Agreements, etc.)
5. We follow all HUD Regulations in preparation of the HUD Settlement Statements and are sure that ALL disbursement checks MATCH EXACTLY what is shown on the HUD Settlement Statement.
6. The agent’s closing and settlement policies adhere to the Texas Department of Insurance Basic Manual of Title Insurance which contains rate procedural and administrator rules that govern title companies in Texas.

Specific Detailed Guidelines: Disbursement Of Proceeds Buyer/Borrower Proceeds:

• Any amount shown on line 303 of the HUD-1 Settlement Statement (funds due from Buyer/Borrower) must come into your escrow/trust account from the borrower or be disbursed to your borrower as shown in Section D.
• Any funds received by any other party must reflect on a separate line in the 200 series designating the source of funds.
• In regions where the buyer/borrower funds are credited prior to the printing of the final HUD-1 statement, those funds should be reflected in the 200 series of the HUD-1 statement showing the source of funds and line 303 should reflect zero proceeds or a refund, if any due to the buyer/borrower.

Seller Proceeds:

• Seller proceeds are not assigned to other parties or otherwise disbursed and are disbursed only to the Seller, as defined in the Loan Closing instructions and HUD-1. Where the Seller requests the proceeds to be paid otherwise, pre-closing clearance is obtained by us. Multiple disbursements to the same payee are not acceptable especially when asked to disburse in increments of $10,000 or less as this may be perceived as participation in a money laundering scheme.
• Borrower proceeds from a refinance, if any, are only to be paid in strict compliance with the written closing instructions provided by the funding lender. Pre-closing consent is obtained from the lender on any request to pay additional parties. If such consent is obtained, the changes are listed in the 1300 section of the HUD-1. We do not rely on approval of the mortgage broker.

Mortgage Payoffs:

• Must be in writing and should reference loan number and property address in addition to borrower’s name
• We watch home equity lines of credit and obtain a signed ’closing letter’ from the borrower to the lender requesting that the credit line be closed.
• Include sufficient detail on the payoff check to identify the property and borrower.
• If property is in foreclosure, we make certain we have accounted for any attorney’s fees and other court costs.
• Sellers are never to deliver their own payoff check. Payoff checks must be delivered in a manner in which the date and time of receipt of the check can be documented.

Escrowed Funds Disbursement: Purpose:

1. Approvers’ and/or check signers’ responsibilities on external disbursements are to ensure the payment amounts are supported, proper vendors are paid, and disbursements have been properly authorized by the escrow officer.
2. Approvers’ and/or check signers’ responsibilities over our fee income are to ensure that check/journals to recognize our fees are only processed after the order has closed.

Procedure:

• All escrow disbursements (check and/or wire) require two approvers, one of which must be a licensed escrow officer. Evidence of the two approvals is required on the check/wire request and the check disbursement register for every escrow.

Cancelled Checks and Stop Payments: Purpose:

• Check fraud and wire fraud are expensive issues. The ’holder in due course’ doctrine gives legal protections to innocent third-party recipients of checks and wires that are presented to them and not patently counterfeit.
• A Cashier or Teller Check in the hands of a holder without knowledge of a defense must be honored by the financial institution on which it is drawn because it is the obligation of the financial institution.
• Under Company, policy failure to observe the procedure detailed below may result in the Agent being personally liable if the Company suffers a loss on the transaction when a lost, stolen or destroyed item is subsequently presented and paid.

Procedure:

• Cashier’s or Teller Checks
• Payment on a Cashier’s or Teller check issued by the Company may not be stopped without:
  • Obtaining approval from the appropriate supervisor before directing that a replacement item is issued.
  • Obtaining an affidavit concerning the lost, stolen or destroyed item from the person whose obligation is paid by the cashier’s or teller’s check.
  • Satisfying any requirement by the bank upon which the check is drawn to obtain a bond or other form of security for the amount of the check, if the bank is going to reissue the check before a 90 day period has elapsed.

Trust Account Checks

• A check that has been issued and processed in the accounting records, but subsequently lost, stolen or returned to the Company should be ’voided’.
• If the original check has been returned, mark it ’Void’, remove the signature portion of the check and forward it to accounting for adjustment to the appropriate records. Voided checks, if found, must be retained.
• Unless a check has been lost or stolen, do not stop payment without consulting your supervisor.
• If the check has been lost or stolen, first determine if the check has cleared the bank.
  • The accounting department should contact the bank to verify that the check has not cleared the bank.
  • If it has not cleared, the bank should be advised both orally and in writing to place a stop payment on the check.
  • No check may be reissued until it has been determined that it has not cleared the bank and you have received authorization from the accounting department.
  • If the original check is subsequently found, it should be forwarded to the accounting department with a note across the face of the original check stating that a stop payment was issued on this check and indicating the date of the stop payment.

Disbursement or Receipt of Funds By Wire: Purpose:

• Generally, wire transfers are not subject to a stop payment, recall, cancellation or adjustment. Once a wire request has been executed the funds immediately become the property of the transfer recipient. Because of these concerns and to minimize the risk of loss from errors or fraud, wire transfer authority is to be centralized within a limited number of management, escrow, accounting or administration employees.

Procedure:

• No escrow department employee shall be unilaterally authorized to issue or approve a wire transfer.
• Escrow officers initiate the wire transfer in the secure online system. Then a second authorized employee reviews he wire request and approves the wire.
• All wire transfers must have a separate authorized employee initiate the wire and a second authorized employee approve it. One must be a licensed escrow officer.
• In all cases of initiation of a wire transfer by an escrow officer or other authorized party, a reasonable security procedure must be used to validate the transfer.

Mortgage Fraud Awareness and Prevention: Purpose:

• It is in our own self-interest to be vigilant for signs of potential mortgage fraud. The costs of becoming drawn into a mortgage fraud investigation are substantial, and you personally may be drawn into an investigation. Regulators and underwriters, as well as the general public, consider us to be a significant part of the process and system for minimizing mortgage fraud.
• Our agency will not tolerate ANY deviation from standard closing procedures that would result in Mortgage fraud.

Procedure:

• Adhere to all Underwriting Bulletins concerning settlement issues.
• Mortgage fraud has many moving pieces, but can include any of the following:
  • A person that knowingly, with the intent to defraud, does any of the following is guilty of the crime of residential mortgage fraud, punishable as provided in this section:
  • A person that makes a false statement or misrepresentation concerning a material fact or deliberately conceals or fails to disclose a material fact during the mortgage lending process.
  • A person that, during the mortgage lending process, makes or uses a false pretense, or uses or facilitates the use of another person’s false pretense, concerning the person’s intent to perform a future event or to have a future event performed.
  • A person that uses or facilitates the use of a false statement or misrepresentation made by another person concerning a material fact or deliberately uses or facilitates the use of another person’s concealment or failure to disclose a material fact during the mortgage lending process.
  • A person that receives or attempts to receive any proceeds or any other money in connection with the mortgage lending process that the person knows resulted from a violation.
  • A person that files or causes to be filed with the register of deeds of any county of this state any document involved in the mortgage lending process that the person knows to contain a deliberate material misstatement, misrepresentation, or omission.
  • A person that fails to disburse funds in accordance with the settlement or closing statement for the mortgage loan.
  • A person that solicits, encourages, or coerces another person to participate in any of the above activities.

Veritas Title Partners Settlement Policies & Procedures

Best Practice 5 – Title Production: Adopt and maintain written procedures related to title policy production, delivery, reporting and premium remittance. Appropriate procedures for the production, delivery and remittance of title insurance policies ensures title companies meet their legal and contractual obligations. Purpose:

• Appropriate procedures for the production, delivery and remittance of title insurance policies ensures title companies meet their legal and contractual obligations.

Title Policy Delivery; Reporting & Premium Remittance

1. Policy Delivery to Insured Parties: While our goal is to deliver policies to our customers within forty-five days of a closing performed by us, provided that all of the terms and conditions of the title insurance commitment have been satisfied, title policies are generally delivered to customers no later than by the fifteenth of the second month after the closing.
   • As a general rule, policies are generally prepared after the closing documents and necessary releases are recorded.
   • For closings and disbursements made by us, the policy may be issued to the customer prior to receipt of the release, if waiting for the release to be recorded will cause the policy issuance to be delayed beyond the time frame above.
   • For closings and disbursements not performed by us, the policy will be issued when all necessary documentation is of record. We follow up on the status of these transactions every 60 days.
2. Policy Reporting: For closings performed by us, policies will be reported to our underwriters no later than by the 15th of the second month after the closing.
3. Payment of Premiums: Title premiums will be paid no later than 45 days after the end of the month in which the closing occurred in compliance with Texas Title Insurance regulations.
4. Premium accounts for funds owed to underwriters: We maintain premiums owed to our underwriters in a premium escrow account separate from our operating account.

Title Policy Production and File Maintenance

1. Title insurance orders will be processed either on the same day or the next business day after receipt.
2. Title insurance searches and exams will be made with due regard to recognized title insurance underwriting practices and in accordance with our Underwriter’s bulletins, manuals and other instructions, including any state or federal applicable requirements.
   • Each policy issued on behalf of our Underwriter(s) is issued upon a determination of insurability of title which includes, but may not be limited to:
     • a) a search from earliest public records or in accordance with applicable state law and/or Underwriter’s written instructions; and
     • b) an examination of all documents affecting title to the subject property.
3. Each title order or transaction is prepared and maintained in a separate title file that contains all documents upon which we relied to make our determination of insurability, including, but not limited to: affidavits, maps, plats, lien waivers, surveys, title reports, searches, examinations, and work sheets, together with a copy of each commitment, policy, endorsement and other title assurance issued.
4. We maintain a separate closing file for each transaction, with closing file containing, without limitation; closing statements, disbursement worksheets, copies of all checks disbursed and receipted, deposit slips, escrow agreements and any other instruments or documents executed or created at closing. We generally keep both the title and closing files for each property together in one physical folder or electronic filing system that allows tracking and future review.
5. The title and closing files are preserved in accordance with applicable State document retention requirements, or in the case of a legal hold order, in accordance with instructions of our Underwriter(s).
6. In the event that we destroy or disseminate the files for any reason, we shall maintain and protect any confidential or private information contained in such files in accordance with applicable State and Federal law.
7. We maintain a policy register in a form approved by our Underwriter showing the disposition of all policies and other pre-numbered forms furnished. Even though these logs/registers are now generally kept electronically by our underwriter, we are able to reconcile our records against our underwriters’ records. Differences are properly identified as voided policies or otherwise.
8. A review our Agency Agreements with our Underwriter(s) shows that if there is a termination of our Agency Contract, ownership of, and title to, the title files shall vest in each underwriter upon which the policy was issued. Our title files will be sent to each respective underwriter.
9. When claims are filed and the underwriter requests a copy of the file in question, or when files are requested for other reasons, we promptly search for and provide the requested documentation. These include:
   • all documents received by Agent in which Underwriter is a party to any administrative and/or judicial proceedings;
   • all written complaints or inquiries made to any regulatory agency regarding transactions involving title insurance policies, endorsements, commitments or other title assurances of a particular Underwriter;
   • any information alleging a claim involving a policy, commitment, endorsement or other title assurance of an Underwriter or a transaction for which an Underwriter may be liable; and
   • all original documentation and work papers associated with the transaction or conduct giving rise to any examination, claim or complaint.

Best Practice 6 – Errors & Omissions and Fidelity Coverage. Appropriate levels of professional liability ensure that title agencies and settlement companies have the financial capacity to stand behind their professional services. Purpose:

• Appropriate levels of professional liability (errors and omissions insurance) ensure that title agencies and settlement companies have the financial capacity to stand behind their professional services. In addition, state law and contractual obligations may require a company to maintain fidelity bond and surety bond policies with prescribed minimum amounts of coverage.

Professional Liability and Fidelity Coverage Policy

1. Professional liability or errors and omissions insurance
   • The company maintains professional liability insurance in the amount of no less than $2,000,00.00. This amount is appropriate given the company’s size and complexity and the nature and scope of its operations; the amount is not less than the amount agreed to in the company’s underwriting agreement(s). The insurance carrier is nationally known and has appropriate Best ratings.
     
     
   • Coverages / Endorsements are reviewed annually and are added or subtracted to reflect current changes in the practices of the industry and to reflect new threats to our business as they arise, such as cybercrime.
2. Fidelity bond coverage (Protection for Agent against employee dishonesty)
   • The company maintains a fidelity bond policy in an amount of not less than $100,00.00. The company reviews both State law and our Issuing Agency Contracts to verify that our coverage meets or exceeds their respective requirements. This coverage is carried even if State law or our Issuing Agency Contract do not require it from time-to-time as conditions or laws change.
3. Surety coverage, Closing Protection Letters (Protection for consumers against closing disbursement issues)
   • (Alternate A) In Texas, state law requires us to offer closing protection coverage to buyers, sellers, and lenders. We encourage buyers, sellers, and lenders to purchase those products and maintain a signed disclosure form in our files evidencing our compliance with state law in connection with those.
     
     
   • (Alternate B) Alternatively, the company ensures that the Closing Protection Letter coverage, where mandated by statute, is issued in connection with the disbursement or that a statutory indemnity fund is established to cover fidelity losses not otherwise covered by the protections afforded by the underwriter.

Best Practice 7 – Consumer Complaints Adopt and maintain procedures for resolving consumer complaints. A process for receiving and addressing consumer complaints is important to ensure that any instances of poor service or non-compliance do not go unresolved. Purpose:

• A process for receiving and addressing consumer complaints is important to ensure that any instances of poor service or non-compliance do not go unresolved.

Summary of Procedure

Action	Timeframe
Customer complaint received	Day 1
Complaint intake form is filled out	By end of 1st business day
Complaint intake form delivered to Complaint Coordinator by the end of the day	By end of 1st business day
Status update is made to the consumer. If the complaint is not resolvable within 3 additional business days.	By end of 5th business day
Status update every 3rd business day thereafter.	By end of 8th business day & subsequent days until resolved
Complaint intake form is completed and a copy is either uploaded to server or kept in a separate file along with others	At resolution