It seems that, as we all get busier, we are receiving more and more questions on what you can and cannot do in Texas.  Fortunately, most underwriters are aware that Texas is one of the three most regulated, if not the most regulated, states in the country when it comes to title insurance.  All of the forms and rates for Texas title insurance are promulgated by the Texas Department of Insurance (TDI).  As a result of this, we cannot issue any ALTA forms in Texas.  The following is a link to the Title insurance Basic Manual, http://www.tdi.texas.gov/title/titlemm4.html.

I wanted to take this opportunity to address some of the most frequently asked questions concerning what can or cannot be done.

1 .Can the lender be shown as “ABC Bank, its successors and/or assigns as their interests may appear”?  Answer:  No, this is not permitted under Procedural Rule P-7.  The only language that is permitted is ", and each successor in ownership of the indebtedness secured by the insured mortgage, except a successor who is an obligor under the provisions of Section 12(c) of the Conditions".

2. Can the tax exception, usually Exception 5 on Schedule B of a commitment, be amended to state “Taxes for the year _____, not yet due and payable.” Answer:  No, the language contained in Exception 5 is promulgated.  Procedural Rule P-20 sets forth what is allowed to be amended on a Loan Policy only. 
3. May we under or over insure a property in Texas? Answer:  No, Procedural Rule P-66 provides the allowed formula for the amount of insurance.
4. May we issue an Environmental Endorsement (T-36)? Answer: Possibly.  At this time the only environmental endorsement that is available in Texas is the T-36 for a lender only.  However, the issuance is limited to only properties that are “used primarily for residential purposes”.  This does include apartment buildings, hotels, nursing home or other long term care facilities, or hospitals.  There is a T-36.1, commercial environmental endorsement that has been approved by TDI.  However, we cannot issue the T-36.1 yet since a Rate Rule has not been established by TDI for this endorsement.
5. Who may sign a Texas policy? Answer: All Texas commitments and policies must be “wet signed” by a licensed Texas title insurance agent.
6. Do we send you just your portion of the title premiums (or Can we Service Fee your portion of the premium)? Answer:  100% of the title premiums must be received by the Texas office who will sign the policy.  The portion of the premiums that are due to the title owning office are then sent back via wire transfer or service fee.

This is only the tip of the proverbial iceberg. Your comments or questions are appreciated and will be responded to.  We are ready, willing and able to assist you with your Texas matters and guide you through the procedures so that a policy is properly issued to your customer.