Colorado § 10-11-108 - Prohibitions.

§ 10-11-108. Prohibitions.

(1) A title insurance company or title insurance agent shall not:

(a) Engage in the business of guaranteeing the payment of the principal or the interest of bonds, notes, or other obligations;

(b) Transact, underwrite, or issue any kind of insurance other than title insurance;

(c) Give or receive or attempt to give or receive remuneration in any form pursuant to any agreement or understanding, oral or otherwise, for the referral of title insurance business;

(d) Give or receive or attempt to give or receive any portion or percentage of any charge made or received in connection with the business of title insurance if such charge is not for services actually rendered. For purposes of this article, "services actually rendered" shall include but not be limited to a reasonable examination of a title, including instruments of record, and a determination of insurability of such title in accordance with sound underwriting practices; "services actually rendered" shall not include the mere referral of title insurance business.

(2) Nothing in this article, or in any other provision of law governing the insurance industry, shall be construed to prohibit:

(a) Compensation by a title insurance company of an attorney who is licensed to practice in Colorado for services actually rendered in connection with a real estate transaction, regardless of whether such attorney represents a client in such real estate transaction. Compensation of the attorney for services actually rendered shall not include the payment of an hourly fee paid by the client combined with a payment from the title insurance company for the same service; except that prior to issuing any title insurance commitment, such attorney shall disclose to any party represented by such attorney in the transaction for which the commitment shall be issued that such attorney may be compensated for the issuance of such title insurance commitment.

(b) Payment to any person of a bona fide salary or compensation for payment of goods and facilities actually furnished or for services actually rendered.

(3) Any party to a transaction which is subject to this section shall have a right of action for any actual loss or damage resulting from any violation of this section.

Source: L. 69: p. 522, § 1. C.R.S. 1963: § 72-26-8. L. 92: Entire section amended, p. 1748, § 1, effective April 24.

ANNOTATION

Law reviews. For article, "Affiliated Business Arrangements: Compliance with RESPA and H.B. 06-1141", see 35 Colo. Law. 65 (Nov. 2006).

By failing to require "good funds" to complete a real estate closing in violation of § 38-35-125 and this section, title insurance agency injected an "illegal purpose" into the situation and the bargain became illegal. Guardian Title Agency, LLC v. Matrix Capital Bank, 141 F. Supp. 2d 1277 (D. Colo. 2001).