41-2708. Determination of insurability — Prohibited risks — Rebates. (1) Insurability. No title insurance on real property in the state of Idaho shall be issued unless and until the title insurer or its agent:
(a) Owns or leases, separately or jointly with another, tract indexes and abstract records of the county in which the property is located; and
(b) Has caused to be made a search and examination of the title and a determination of insurability of title in accordance with sound title underwriting practices.
Evidence thereof for each policy shall be preserved and retained in the files of the title insurer or its agent. In lieu of retaining the original copy, the same may be reproduced by any photographic, photostatic, microfilm or microcard type of system or process that actually reproduces or forms a durable medium for reproducing the original.
(2) Prohibited risks. No title insurer doing business in this state shall guarantee the payment of deeds of trust or mortgages on real property. Nor shall any title insurer intentionally issue a title insurance policy without showing any outstanding enforceable recorded liens and encumbrances which are of record against the real property, except under circumstances the director of the department of insurance under his rulemaking powers may approve. Such guaranty of mortgage payments or intentional omission of such outstanding liens and encumbrances in violation hereof shall, upon proof thereof to the satisfaction of the director of the department of insurance, subject the insurer to a fine not to exceed two thousand dollars ($2,000) and to the revocation of, suspension of, or refusal to renew a certificate of authority.
(3) Rebates. Section 41-1314(1), Idaho Code, shall be applicable to any person or entity and all employees, officers, agents, attorneys and solicitors thereof engaging in the title insurance business as to rebates and illegal inducements as in said section defined. The words "as inducement to such insurance" and "or in connection therewith" shall be construed to include but not be limited to underwriting premium, agent’s commission, abstracting charges, title examination fees, closing charges, escrow fees, trustee fees, and foreclosure fees relating to deeds of trust. No insured in a policy nor any other person directly or indirectly connected with the transaction involving the issuance of a title insurance policy, including but not limited to mortgage brokers, real estate brokers and agents, builders or attorneys, nor any employee, agent or representative or solicitor thereof, shall knowingly receive or accept, directly or indirectly, any such rebate or illegal inducement. No title insurance company or title insurance agent shall quote or make any charge for title insurance to any person less than the currently filed rate for such risk with the department of insurance. Nothing in this section or this title shall be deemed to prohibit a title insurer or title insurance agent from providing a reimbursement or discount of the premium otherwise payable for a title insurance policy and for any escrow fees otherwise charged in a transaction handled by such title insurance company or title insurance agent involving a bona fide employee’s residence. Each such person and entity giving or receiving a rebate, illegal inducement or a reduction in rate in violation of this section shall, in addition to the other penalties set forth in title 41, Idaho Code, for violation thereof, be liable for three (3) times the amount of such rebate, illegal inducement or reduced rate.
(4) Forwarding fees. No person forwarding or directing title insurance business to a title insurer or title insurance agent in Idaho, nor such insurer or agent receiving such business, shall give or receive anything of value, or a portion of the premium, therefor.
[41-2708, added 1973, ch. 135, sec. 5, p. 252; am. 2018, ch. 213, sec. 2, p. 482.]