The North Carolina Title Insurance Rating Bureau has the responsibility of setting appropriate rates for risks covered by title insurance companies. The Rating Bureau has filed, and the NC Department of Insurance has approved a premium for insured closing services protection. Until now, insured closing protection coverage has been provided without additional premium. Accordingly, the practice of not charging for this protection is not appropriate for the risks incurred and is contrary to law.

In accordance with this change, all commitments issued by all title insurance companies, will include an insured closing protection charge of $.50 per thousand based on title insurance coverage from $0.00 to $100,000.00 plus $.10 per thousand from $100,001.00 to $500,000.00. There is no minimum amount charged for the ICL, but the maximum amount to be charged is $90.00. (i.e., $90.00 is the charge for $500,000.00 total coverage under the ICL, so there is NO additional charge for any ICL coverage over $500,000.00). The combination of premiums for title insurance and insured closing services shall be one undivided charge pursuant to NCGS § 58-26-4(d).

There will be NO change to the title insurance premiums as they are currently charged; reissue rates, developer rates, and commercial rates will still apply, where appropriate. The change is an additional charge for the ICL and is applicable to all commitments. The coverage is for lenders and owners, but it should be noted that it is NOT available unless a commitment is requested. The protection is also available when the commitment is issued for owner’s only coverage.

NOTE: The premium due, as shown on all commitments issued on or after October 1, will be one combined premium for the ICL coverage and the title insurance coverage.

This action is consistent with the provisions of the Model Title Insurance Act which was sponsored by the National Association of Insurance Commissioners and provides for a charge for insured closing protection. That group recognized closing protection as a significant risk for which the insurers must be compensated. There is no provision for any title insurance company in North Carolina to opt out of this mandated charge.

IT SHOULD BE NOTED THAT THE CHARGE FOR CLOSING PROTECTION IS A PREMIUM AND SUBJECT TO THE REGULATION OF THE DEPARTMENT OF INSURANCE, INCLUDING SANCTIONS FOR INTENTIONAL DEVIATION FROM FILED RATES.