ATG SPECIAL BULLETIN

Attention ATG Agents:

Effective January 1, 2011

REMINDER: New Closing Protection Letters and Procedures for Illinois

EDITOR'S NOTE: This information was reported in previous issues of ATG publications (The Trusted Adviser and Casenotes and Underwriters' Bulletin) and is posted on the ATG website and within ATG REsource software. 

Starting January 1, 2011, ATG staff will issue all closing protection letters for closings on Illinois property. A Closing Protection Letter (CPL) is a form of insurance issued by title insurance companies, insuring the actions of a particular attorney, agent, and/or closer in conducting a closing. This insurance has been offered primarily to lenders in the past. The CPL coverage is separate from the coverage of the title insurance policy.

New Illinois Public Act 96-1454 creates a new Section 16.1 of the Title Insurance Act, 215 ILCS 155/16.1, which makes changes to the Title Insurance Act, requires that the underwriter, and not the title insurance agent, issue all closing protection letters. Further, it requires that CPLs be issued not just to lenders, but also to buyers, sellers, and owners in a refinance. CPLs must be issued when either the title insurance agent or the title underwriter conducts the closing. Thus, whenever an ATG agent, or ATG independent closer conducts the closing, ATG must issue CPLs to all parties to the transaction.

The intent of this Act is to make sure all parties to closings have a remedy against a financially-solvent entity for loss of the closing funds or documents, as specified in the letter. It covers ATG agents' actions as well as those of your staff, and covers not just fraud but also negligence, should your office unwittingly get caught up in others' fraud.

Please read the full article to learn more about how these changes will affect you, including new charges. ATG will be considering extending this change to Wisconsin and Indiana CPL issuance later in 2011.

Blanket Closing Protection Letters: In a separate but related change, ATG will no longer issue any blanket CPLs for Illinois property. A blanket CPL is one that does not identify the specific closing, but rather covers all closings conducted by a particular closer or closers.

Contact the ATG Underwriting Department, legal@atgf.com, 217.403.0020, or 312.752.1990, with any questions about this new procedure. Watch your e-mail and www.atgf.com for theOnDemand training session and further information. Thank you.