ALTA BEST PRACTICE 1Establish and maintain current license(s) as required to conduct the business of Title Insurance and Settlement Services.
Our Company's Compliance
The State of South Dakota requirement to conduct business as a title insurance agent is to be a bonded and licensed Abstract Company in compliance with SDCL 36-13. State licenses are issued by the South Dakota Abstracters Board of Examiners a State Board within the South Dakota Department of Labor and Regulation. Licenses renew every two years. Title Services Inc. of SD d/b/a Lincoln County Title Company has been continuously licensed under its current ownership since 1979. Our current Abstract License, number 50, renewed July1, 2015 and runs through June 30, 2017.
In addition to meeting all State of South Dakota requirements for conducting the business of Abstracting, Title Insurance and Settlement Services we are by contract a policy issuing agent of Stewart Title Guaranty Company and Old Republic National Title Insurance Company. The contractual agreements with our two underwriters allow us to issue title insurance policies on their behalf pursuant to their underwriting guidelines and procedures and to provide our lender customers an Insured Closing Protection Letter for each transaction we close. Our agency practices are monitored by our underwriters.
ALTA BEST PRACTICE 2Adopt and maintain appropriate written procedures and controls for Escrow Trust Accounts allowing for electronic verification of reconciliation.
Our Company's Policies and Practices
Escrow funds or other funds the Company maintains under a fiduciary duty to another are separately maintained from the Company’s operating accounts in escrow checking accounts or, in the case of 1031 Exchange funds, in individual pass book accounts (“Safe Harbor Accounts”). Escrow and Safe Harbor Accounts are clearly identified as being “escrow”, “trust” or in the case of a 1031 “for the benefit of”. All accounts are maintained in Federally Insured Financial Institutions. All Escrow Trust Account checks require two authorized signer. There are two Owner/Officers and one employee authorized to sign on our Escrow Checking Accounts. All check stock is stored in a locked cabinet with the only keys in the possession of a company officer who is also an owner. Outgoing wires require that a second authorized signer verify/approve the wire transfer.
A Single Ledger Balance Report is produced in each closing file whenever deposits, checks or wire transfers are made. A Three-Way Reconciliation of our Escrow Checking Accounts is performed monthly by the Company CFO, an Owner who has elected not to be a signer on the accounts, or, if reconciled by an officer with signing privileges on the account, reviewed and approved by the Company CFO.
In addition to our internal controls our escrow accounts, our practices and our procedures are reviewed and audited periodically by our underwriting companies.
ALTA Best Practice 3Protection of Non-public Personal Information (NPI) defined as: 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.
Our Company's Policies and Practices
We will not request a customer’s Social Security Number for any reason other than to verify that a judgment, lien or other legal claim against a party with the same or similar name as the customer is or is not a valid lien held against our customer. To request a customer’s Social Security Number the judgment, lien or other legal claim in question must have Social Security Number or partially redacted Social Security Number associated with it against which the customer’s Social Security Number can be compared. We will prepare and retain an affidavit or affirmative statement by the customer with no more than the last four digits of the customer’s Social Security Number. We will maintain the affidavit or affirmative statement in our title file to verify our reason for clearance of a judgment, lien or other claim should we be challenged to do so in the future.
When we receive a title insurance application or other document from a lender or realtor that contains a customer’s un-redacted Social Security Number we redact the first five numbers of the and leave the remaining four.
We do not enter a customer’s Social Security Number or Tax ID Number into Title Scan, our title production software.
We do enter seller Social Security Numbers or Tax ID Numbers into SoftPro, our closing production software, in order to comply with the Internal Revenue Service’s requirement of us to complete and file a form 1099-S for each qualifying sale transaction. After the annual electronic filing with the IRS Social Security and Tax ID Numbers are copied to a flash drive or other form of electronic media and stored in our bank safety deposit box for the IRS mandated holding/look back period and are purged from our SoftPro data base. Up until filing with the IRS paper copies of forms 1099-S are kept in a locked cabinet, separate from our title and closing files, until we receive confirmation that our electronic report to the IRS was received and accepted. Upon that confirmation the paper copies of form 1099-S are destroyed by a secure data shredding company.
We are required by lenders to obtain and provide to them copies of driver’s licenses or other satisfactory forms of personal identification for all parties to any form of real estate financing. These forms of personal identification are delivered post-closing to the lender with their loan package. As evidence that we obtained and delivered the required ID to the lender we retain a copy filed under the applicable closing file number in a locked cabinet. Copies of driver’s licenses are destroyed in the same manner and at the same time as the 1099-S.
We use secure portals at the direction of lenders or encrypted email for the delivery of all work product generated by us or information transmitted by us.
Our network is protected by VIPER BUSINESS ANTIVIRUS VER. 7.05725 and MALWAREBYTES ANTI-MALWARE.
All PC’s on our network are password protected. Each Owner/Officer has a complete list of individual PC passwords. Employees are prohibited by our written policy of computer usage from sharing/giving the password to their PC with anyone other than an Owner/Officer.
We have a written Computer Use Policy stating for our employee’s benefit the acceptable parameters of use of all forms of Company supplied electronic media and services, including computers, e-mail, telephones, voicemail, fax machines, scanning devices, intranet, Internet and the World Wide Web. We have a background check on each employee in our employment on or after August 1, 2015. Our network system programs/data bases are backed up each business day on tape backup and moved off site the following day. The tapes are rotated so that the five tapes used for backup week 1 are used for backup week 3 and the five from week 2 are used in week 4. The final tape backup for a given month is taken out of the tape rotation at the end of each month and not returned to the rotation for six months.
As an extra layer of caution and protection we have taken out a Cyber Liability Policy with Lloyd’s of London. A copy will be provided upon request.
ALTA Best Practice 4Adopt standard real estate settlement procedures and policies that help ensure compliance with Federal and State Consumer Financial Laws as applicable to the settlement process.
Our Company's Policies and Practices
Recording procedures: It is our policy and practice to deliver documents from each completed closing to the Office of the Lincoln County Register of Deeds: (i) no later than the first (1st) business day following the date of Consummation (Settlement) if closed in our office; (ii) no later than the first (1st) business day following our receipt of documents if the Consummation (Settlement) is not performed by our Company. Recording rejections, if any, are addressed and corrected, if the cause of rejection can be corrected by us, on the same day the rejected documents are received back in our office or we are notified by the Register of Deeds of the rejection and are afforded the opportunity to make the correction in the Office of the Register of Deeds.
Pricing procedures: Title insurance rates filed with the South Dakota Department of Insurance. All of our title premium charges comply with the filed rates of our underwriters. All employees involved in pricing and billing our products are trained to look for and give any appropriate credits for prior policies. If a credit is missed but later brought to our attention through follow up on our part or brought to our attention by an outside party a refund of any overpayment already received will be made or if discovered prior to consummation will be corrected.
ALTA Best Practice 5
Adopt and maintain written procedures related to title policy production, delivery, reporting and premium remittance.
Title policy production and delivery: Title insurance policies are issued and delivered to customers within thirty days of the later of (i) the date of Consummation (Settlement), or, (ii) the date that the terms, conditions and Schedule B-I requirements of the title insurance commitment are satisfied.
Premium reporting and remittance: We report policies to our underwriters monthly no later than the last day of the month following the month in which the insured transaction was consummated (settled) and payment of premium due has been received by us. Premiums due our underwriters for policies issued are remitted at the same time and under the same schedule as the policy that the premium relates to is reported to the underwriter.
ALTA Best Practice 6
Maintain appropriate professional liability insurance and fidelity coverage.
Our Company's Compliance
We have maintained professional liability insurance (errors and omissions insurance) continuously since the acquisition of Lincoln County Title Company by Title Services Inc. of SD on January 1, 1979. From and after January 1, 1979, through the August 1, 2015, the date of our complete acceptance and compliance with ALTA’s Best Practices, we have had no claims made against our professional liability insurance. Our current Title Agents, Abstractors and Escrow Agents Professional Liability Insurance Policy issued by Lloyd’s of London specifically covers our business practice as a title agent, abstractor, escrow agent and 1031 qualified intermediary and accommodator, includes a CFPB Endorsement and has a retroactive date of April 1, 1989. A copy of our full errors and omissions policy will be provided upon request.
ALTA Best Practice 7
Adopt and maintain written procedures for resolving consumer complaints.
Our Policy: We strive every day in our business to perform at the highest level and do not expect to receive consumer complaints as a result of any action by us. In the event that we receive a complaint we do have a procedure in place that is designed to quickly address the concerns of the complainant and achieve the ultimate goal of resolving the complaint to as complete a satisfaction of the complainant as is humanly possible. After thirty-six years of successful operation we understand that a complaint, no matter how small or seemingly insignificant it might appear, is significant to the complaining party and if not quickly addressed will fester and become that much harder to amicably resolve. Communication is often the key to any successful complaint resolution.
Our Procedure: Any complaint made to our company that is not initially made directly to or received directly by one of our three corporate officer/owners is reported to and turned over to one of them at the earliest possible moment along with our in house form `Memorandum of Complaint’ documenting to that point: the nature of the contact by the complainant; the nature of the complaint itself; identifying the complainant along with their contact information; and stating the relationship/connection of the complainant to the transaction that is at the root of the complaint. It is the responsibility of the officer handling the complaint to: quickly determine if the actions of a third party contributed to the cause of the complaint and should be notified; determine if the complaint could rise to the level of a possible claim under one of our title policies and to notify the applicable underwriter; to determine if our errors and omission carrier should be notified of the complaint; and to determine if legal counsel should be hired to assist in resolving the complaint. Any of these steps that are necessary must be taken within the first days of receiving and determining the nature of the complaint and our involvement. At all times the complaining party must be kept apprised of the actions we are taking to bring a resolution to the matter.