December 28, 2023
In This Issue:
- TDI Commissioner Issues Order Approving Exhibits for Formal Basic Manual Rulemaking Following Stakeholder Meetings – Final Order and Effective Date Will Be Issued After Comment Period
- Corporate Transparency Act: Are You Exempt?
TDI Commissioner Issues Order Approving Exhibits for Formal Basic Manual Rulemaking Following Stakeholder Meetings – Final Order and Effective Date Will Be Issued After Comment Period
TLTA | Dec. 22, 2023
On Dec. 21, Texas Department of Insurance Commissioner Brown
issued a formal order approving the exhibits containing a proposal to update, correct and clarify rules and forms in the Basic Manual. This order does not address the Basic Premium Rate, which is being addressed at TDI under a separate proceeding.
TDI's adoption of this formal order follows months of work with TDI that began last December with a public meeting and continued with additional public meetings this summer and in November, wherein issues were discussed among TLTA members, stakeholders, and TDI staff, resulting in an improved rules package.
When will these changes be effective?
Next, the formal rule proposal will be posted in the Texas Register, likely in January, inviting general public comment. TLTA will review and comment if necessary. We are grateful for TDI's good work and look forward to completing the final steps in this ongoing rulemaking process. After the comment period, a final order along with an effective date will be issued.
The rules and endorsement rate adjustments proposed by TLTA during this process were generated by
TLTA's Regulatory Committee and approved by
TLTA's Board of Directors following many years of work. Our proposed rule package contained several improvements to current procedural rules, a modernization of certain fees, new endorsements, and plain language rewrites.
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Corporate Transparency Act: Are You Exempt?
Leslie S. Johnson, TLTA Board Member and Judiciary Committee Chair | Dec. 20, 2023
The 2021 Corporate Transparency Act (“CTA”) is new federal legislation that becomes effective January 1, 2024 and may require certain business entities operating in or around the title insurance industry to report personal information about their individual owners to the federal Financial Crimes Enforcement Network (“FinCEN”).
Specifically, the CTA requires a “Reporting Company” to provide (and update) personally identifying information about the company’s “Beneficial Owners” and potentially its “Company Applicant(s)” to FinCEN by certain dates. Its purpose is to create a registry of beneficial ownership information that law enforcement and regulators can quickly and easily access in their fight against organized crime, money laundering, and bad actors hiding behind shell entities.
The CTA defines a Reporting Company as a “corporation, limited liability company, or other similar entity that is “created by the filing of a document with a secretary of state or a similar office under the law of a State or Indian Tribe . . . .” Therefore, filing entities may be Reporting Companies if they do not qualify for an exemption. However, non-filing entities – such as common law trusts, general partnerships, and sole proprietorships – do not constitute Reporting Companies and do not need to file with FinCEN.
There are 23 exemptions to the definition of a Reporting Company, the most relevant to the title industry being exemptions for: (1) a publicly traded company; (2) an insurance company; (3) a state-licensed insurance producer; (4) a large operating company; and (5) a wholly-owned subsidiary of those exempt entities.
Read more »
TLTA Editor's Note: The U.S. House passed HR 5119 earlier this month, which would substantially expand the deadline for existing companies to 2 years, and 90 days for all new companies (no drop off in 2025). If approved by the Senate too, this legislation would also extend the deadline to report changes to 90 days. This legislation is currently pending in the Senate's Committee on Banking, Housing and Urban Affairs.