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UPDATE FROM ATG ADMINISTRATION:

ALTA Best Practices 2.0

The American Land Title Association (ALTA) published an updated version of its Best Practices document on July 19, 2013. The updates followed numerous meetings with title agents, underwriters, major lenders, and regulators. The new version, coined Best Practices 2.0 (see ALTA Best Practices Framework: Title Insurance and Settlement Company Best Practices), does not make dramatic changes from the earlier version but has clarified and simplified several matters. Of great help in understanding and implementing the procedures is a new section that incorporates definitions of key terms, such as "Non-public Personal Information," and others used throughout Best Practices materials. The most significant change was in Best Practice #2, removing the requirement to conduct credit checks on employees. ALTA also modified the language throughout the document making it clearer and more consistent.

The key changes in Best Practices 2.0 are as follows:

• Best Practice #1 - Licensing: Incorporates a definition of Licenses: "Title Agent or Producer License or registration, or any other business licensing requirement as required by state law, or a license to practice law, where applicable." There were other minor language changes based on this definition.
• Best Practice #2 - Escrow Trust Accounts: Removes the requirement to check employees’ credit reports. Clarified that Background Checks are to be completed during the hiring process for employees having access to customer funds. Background Checks going back five years are also to be conducted every three years for employees having access to customer funds. Incorporates a definition of Background Check: "A background check is the process of compiling and reviewing both confidential and public employment, address, and criminal records of an individual or an organization. Background checks may be limited in geographic scope. This provision and use of these reports are subject to the limitations of federal and state law."
• Best Practice #3 - Non-public Personal Information: Incorporates a definition of Non-public Personal Information (NPI): "Personally identifiable data such as information provided by a customer on a form or application, information about a customer’s transactions, or any other information about a customer which is otherwise unavailable to the general public. NPI includes first name or first initial and last name coupled with any of the following: Social Security Number, driver’s license number, state-issued ID number, credit card number, debit card number, or other financial account numbers."
• Best Practice #4 - Standard Real Estate Settlement Procedures: Removes the reference to using electronic recording where available. Modifies "recording procedures" to read: "Submit or ship documents for recording to the county recorder (or equivalent) or the person or entity responsible for recording within two (2) business days of the later of (i) the date of Settlement, or (ii) receipt by the Company if the Settlement is not performed by the Company."
• Best Practice #5 - Title Policy Production, Delivery, Reporting, and Premium Remittance: Modifies "title policy production and delivery" to read: "Issue and deliver policies within thirty days of the later of (i) the date of Settlement, or (ii) the date that the terms and conditions of title insurance commitment are satisfied."
• Best Practice #6 - Professional Liability Insurance and Fidelity Coverage: Simplifies the section dealing with errors and omissions insurance and clarifies that fidelity and surety coverages are mandated only if required by state law or the agency agreement with the underwriter.
• Best Practice #7 - Consumer Complaints: Adds that procedures for resolving consumer complaints must be in writing.

To date, ATG has published articles on Best Practices 1-4; we updated those articles to reflect these recent changes. We will publish our articles on Best Practices 5-7 in the next two months. ATG agents should plan to attend one of our ATG Legal Education programs on this topic. For additional information, please review our ALTA Best Practices Information Center.  

Jerry T. Gorman
ATG Senior Vice President - Downstate Operations

[Last update: 8-22-13]

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