ALTA Best Practices Are The Single Standard By Which Title Insurance Agents Are Measured.
On January 2, 2013, ALTA issued its Title Insurance and Settlement Company Best Practices, with the intent to: “…guide its membership on best practices to protect consumers, promote quality service, provide for ongoing employee training, and meet legal and market requirements. These practices are voluntary and designed to help members illustrate to consumers and clients the industry’s professionalism and best practices to ensure a positive and compliant real estate settlement experience.
- Best Practice 1: Establish and maintain current license(s) as required to conduct the business of title insurance and settlement services— by maintaining state mandated insurance licenses and corporate registrations (as applicable) the company ensures it’s in good standing with the state.
- Best Practice 2: Adopt and maintain appropriate written procedures and controls for Escrow Trust Accounts allowing for electronic verification of reconciliation— with the right, effective escrow controls and staff training help title and settlement companies are best able to meet client and legal requirements for the safeguarding of client funds. These procedures ensure accuracy and minimize the exposure to loss of client funds. Settlement companies may engage outside contractors to conduct segregation of trust accounting duties.
- Best Practice 3: Adopt and maintain a written privacy and information security plan to protect Non-public Personal Information as required by local, state and federal law— this answers Federal and state laws (including the Gramm-Leach-Bliley Act) requiring title companies to develop a written information security program that describes their procedures to protect non-public customer information. The program must be appropriate to the company’s size and complexity, the nature and scope of the company’s activities, and the sensitivity of the customer information the company handles. A company evaluates and adjusts its program in light of relevant circumstances, including changes in the firm’s business or operations, or the results of security testing and monitoring.
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- Best Practice 4: Adopt standard real estate settlement procedures and policies that ensure compliance with Federal and State Consumer Financial Laws as of 01/02/2013— by adopting appropriate policies and conducting ongoing employee training a real estate settlement company ensures it can meet state, federal and contractual obligations governing the settlement process and, in the process, provide the safest and most compliant settlement. (Back to Top)
- Best practice 5: Adopt and maintain written procedures related to title policy production, delivery, reporting and premium remittance— this ensures that title companies meet their legal and contractual obligations. (Back to Top)
- Best Practice 6: Maintain appropriate professional liability (errors and omissions) insurance and fidelity coverage— the right coverage levels ensures that title agencies and settlement companies have the financial capacity to stand behind their professional services. In addition, state law and contractual obligations may require a company to maintain fidelity bond and surety bond policies with prescribed minimum amounts of coverage. (Back to Top)
- Best Practice: Adopt and maintain procedures for resolving consumer complaints— ensures that all instances of poor service or non-compliance come to light. (Back to Top)