Sec. 38a-424a-3 - Required practices

ยง 38a-424a-3. Required practices

(a) Existing owner's policy-sale or mortgage. If the real property has been identified in an Indian land claim lawsuit which has been filed in court, or is the subject of a notice of intent to sue, and an owner's policy has been issued by the title insurer to the present owner, the title insurer, upon payment of the appropriate premium, shall issue a new owner's policy to a bonafide purchaser of that real property and a new loan policy to that purchaser's mortgagee taking the Indian land claim exception contained in subsection (e) of this section. If the amount of insurance coverage requested exceeds that under the existing policy the title insurer may limit any loss or damage to the insured by reason of an Indian land claim to the amount of the existing policy.

(b) Existing loan policy-refinancing. If the real property has been identified in an Indian land claim lawsuit which has been filed in court, or is the subject of a notice of intent to sue, and a loan policy has been issued by the title insurer to the present mortgagee, the title insurer, upon payment of the appropriate premium, shall issue a new loan policy to the lender taking the Indian land claim exception contained in subsection (e) of this section. If the amount of insurance coverage requested exceeds that under the existing policy, the title insurer may limit any loss or damage to the insured by reason of an Indian land claim to the original amount of the existing loan policy.

(c) Existing loan policy-foreclosure or deep-in-lieu-of-foreclosure. If the real property has been identified in an Indian land claim lawsuit which has been filed in court, or is the subject of a notice of intent to sue, and a loan policy is held by the foreclosing lender, the title insurer that issued such policy, upon payment of the appropriate premium, shall issue an owner's policy to the mortgagee named in the loan policy or to the transferee of such mortgagee when title to such real property has become absolute in the mortgagee or its transferee by virtue of a judgment of strict foreclosure or of a deed in lieu of foreclosure from the mortgagor taking the Indian land claim exception contained in subsection (e) of this section. If the amount of insurance coverage requested exceeds that under the existing policy the title insurer may limit any loss or damage to the insured by reason of an Indian land claim to the original amount of the existing loan policy.

(d) Waiver requirement. As a condition to the issuance of a policy pursuant to subsections (a), (b) and (c) of this section, the title insurer may require the insured under the existing policy to waive or relinquish any right to file a claim under the existing policy concerning any Indian land claims.

(e) No reduction in new policy due to pending Indian land claim or notice of intent to sue. A title insurer may take an exception in any policy issued pursuant to subsection (a), (b) or (c) of this section for the pendency of any Indian land claim lawsuit or notice of intent to sue which identifies, describes or includes the property insured by such policy, provided that no such exception shall operate to reduce the scope and level of coverage below that which was provided in the policy being replaced.

(f) No existing owner's or loan policy-sale/refinancing.

(1) If the real property has been identified in an Indian land claim lawsuit which has been filed in court, a title insurer who is not currently the insurer of the property shall issue a policy to a bona fide purchaser or bona fide mortgagee upon payment of the premium, provided that said policy may make exception for any Indian land claim.

(2) If real property is not subject to an Indian land claim lawsuit which has been filed in court but is located in an area subject to a notice of intent to sue, a title insurer who is not currently the insurer of the property shall issue a title insurance policy to a bona fide purchaser or bona fide mortgagee which may make exception for any Indian land claim but shall provide affirmative coverage against actual loss or damage resulting from a final judgment rendered against the insured in any Indian land claim action. The title insurer shall also defend the insured in any Indian land claim lawsuit commenced after the issuance of the policy and shall pay all costs of such defense including court costs, attorney's fees and expenses, all to the extent provided in the conditions and stipulations of the policy.

(3) Coverage for Indian land claims under this section for non-residential real property may be limited to $500,000 if reinsurance coverage is unobtainable from the title insurer's existing reinsurer in the normal course of business.

(Effective December 22, 1994)

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