1. A title insurer may provide a closing protection letter to any person or entity who is a party to a real estate transaction in which a policy of title insurance has been or will be issued by or on behalf of the insurer.
2. A closing protection letter provided by a title insurer pursuant to this section may indemnify a person or entity to whom the letter is provided, under the terms and conditions of the letter as provided by the title insurer, against a loss that is in connection with the transaction for which the letter was provided and which is due to any of the following acts or omissions by a closing or settlement service provider:
(a) Theft or misappropriation of any closing or settlement funds, to the extent that the theft or misappropriation affects the:
(1) Status of the title to the interest in land that is the subject of the transaction; or
(2) Validity, enforceability and priority of the lien of the mortgage on the interest in land that is the subject of the transaction.
(b) Failure to comply with any written closing or settlement instructions, to the extent that the failure affects the:
(1) Status of the title to the interest in land that is the subject of the transaction; or
(2) Validity, enforceability and priority of the lien of the mortgage on the interest in land that is the subject of the transaction.
3. A title insurer shall charge a fee of not less than $25 to each person or entity to which the insurer provides a closing protection letter pursuant to this section.
4. The fee charged pursuant to this section for a closing protection letter:
(a) Must not be included in any agreement requiring a division of fees or premiums collected by or on behalf of the title insurer who provided the letter; and
(b) Shall be deemed earned upon the closing of the transaction for which the letter was provided.
5. A title insurer may not provide or purport to provide indemnification to a person or entity against a loss in connection with acts or omissions by a closing or settlement service provider pursuant to subsection 2 by or through any other product or method than a closing protection letter provided pursuant to this section.
6. As used in this section, “closing or settlement service provider” means a person employed or approved by a title insurer to perform the closing or settlement of a real estate transaction in which a policy of title insurance has been issued by or on behalf of the insurer and may include, without limitation, a title agent or an escrow officer.
(Added to NRS by 2013, 816)
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