International Title Insurance Products. By: James L. Gosdin Stewart Title Guaranty Company (800)

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1 International Title Insurance Products By: James L. Gosdin Stewart Title Guaranty Company (800) March 2009

2 TABLE OF CONTENTS I. International Title Insurance Products...1 II. Observations from Underwriting in the Caribbean Region...6 III. Over-Riding Interest in Torrens Style Jurisdictions in the Caribbean Region...9 Exhibit 1: Stewart International Title Guaranty Policies...12 Exhibit 2: STGC Global Advantage Title (GAT) Owner s Policy of Title Insurance - Urban...15 Exhibit 3: STGC Global Advantage Title (GAT) Lender s Policy of Title Insurance - Urban...20 Exhibit 4: First American Introduction and International Owner s Policy...26 Exhibit 5: First American International Loan Policy...33 Exhibit 6: Fidelity National Title Insurance Co. Introduction and International Loan Policy...37 Exhibit 7: Fidelity National Title Insurance Co. International Owner s Policy of Title Insurance..44

3 INTERNATIONAL TITLE INSURANCE PRODUCTS Title insurance or title guarantees are now more commonly available on land located in other jurisdictions, including Australia, Canada, Bahamas, Barbuda, Belize, Hong Kong, Mexico, New Zealand, and United Kingdom, and in other countries (and jurisdictions) in Asia, Europe and Latin America, from one or more title insurers. Those countries and jurisdictions include: Anguilla Antigua and Barbuda Argentina Aruba Australia Austria Bahamas Barbados Belgium Belize Bonaire Brazil Bulgaria Canada Cayman Islands Chile Columbia Costa Rica Croatia Curacao Cyprus Czech Republic Denmark Dominica Dominican Republic Dubai Ecuador El Salvador Estonia Finland France Germany Greece Grenada Guadeloupe Guam Guatemala Guyana Holland Honduras Hong Kong Hungary India Indonesia Ireland Israel Italy Jamaica Japan Korea, South Latvia Lithuania Luxembourg Macau Malaysia Malta Martinique Mexico Netherlands New Zealand Nicaragua Northern Marianas Islands Palan Panama Peru Poland Portugal Puerto Rico Romania Russia Saba Serbia St. Barthélemy St. Kitts and Nevis St. Lucia St. Martin St. Vincent and Grenadines Saipan Singapore Sint Eustatius Sint Maarten Slovak Republic Slovenia Spain St. Barts St. Kitts & Nevis St. Lucia St. Maarten South Africa Sweden Thailand Trinidad and Tobago Turkey Turks and Caicos United Kingdom (including Scotland) Uruguay Vanuatu Virgin Islands (U.S.) Virgin Islands (British)

4 In many cases, policies or guarantees are issued by the title insurer domiciled in the United States, and the policies or guarantees have forum and choice of law provisions that select the United States. If the title insurer is not authorized to conduct business in the foreign jurisdiction, the policy or guarantee will, in most transactions, be issued to a person that is not domiciled in the foreign jurisdiction. However, qualified subsidiaries are located in some of these foreign jurisdictions, and they then issue their policy or guarantee to local domiciles, with reinsurance (and an assumption certificate recognizing direct liability to the insured), if necessary, to the American parent title insurer. The coverage provided in these policies and guarantees varies greatly, because of the needs of the customer and the different real property laws. Common exclusions, some of which may be modified or deleted, are takings or expropriation not recorded in the public records, mineral and other valuable rights and subsurface and air rights of the state, water rights and rights to streams and shores, matters discoverable by an inspection, unrecorded easements, doing business and foreign investment laws, creditors rights, and taking of land during World War II or during the period immediately preceding or following. Some policies or guarantees as written provide coverage only as to recorded matters, but most policies and guarantees either do insure against many unrecorded matters, or can be modified to do so. Many insure marketable title (perhaps as defined, such as the willingness of the title insurer to reissue) and right of access. Virtually all agree to provide defense in event of a covered claim. Title insurance is available in all provinces and territories of Canada. Six title insurers have offered title insurance policies: FNF Canada, the Canadian division of Fidelity National Financial, Inc. (FNF Canada s title insurance policies are issued and underwritten by Chicago Title Insurance Company which is a subsidiary of Fidelity National Title Group); First Canadian Title, a member of the First American Family of Companies; Stewart Title Guaranty Company; Lawyers Title, Lawyers Professional Indemnity Company, operating under the name TitlePlus; and St. Paul Guarantee Company, a subsidiary of The St. Paul Travelers Companies, Inc. Residential title insurance policies are issued by most of the above-mentioned title insurers. Residential title insurers offer expanded coverage policies, often referred to as Gold or Platinum policies. They contain expanded coverage provisions similar to the ALTA Homeowner s Policy of Title Insurance for a One- to Four- Family Residence, although in Canada the policies generally cover one- to six-family residences. Commercial title insurance policies have been offered by all of the above, except St. Paul Guarantee Company, which has focused on new home and new condominium development. Additionally, for commercial transactions, TitlePlus has limitations with respect to the policy amounts for which it can insure. Title insurance comparable to that available in the ALTA policies may be secured on commercial transactions, and endorsements commonly available in the U. S., such as zoning, assignment of rents/leases, contiguity, doing business, survey, tax parcel, subdivision, tax deed, leasehold comprehensive, first loss, last dollar, revolving credit, usury, and access also are available. Title insurance is available in most of Mexico, either through U.S. companies abroad in some cases, or directly through a qualified insurer in Mexico. Coverage is similar to that available in the United States, and may additionally insure against ejido ownership, a significant coverage as underscored by various claims, and unmarketability of title, and may be expanded by endorsements similar to those available in the United States. An ejido is a communal form of title and ownership of land, but the members of the ejido collective have no property rights in the land individually. There is now a process for transfer of ejido land. Endorsements that may be available in Latin America include access, contiguity, encroachment, easement, comprehensive (restrictions and encroachments), non-imputation, usury, survey, subdivision compliance, special zoning, marketable title, and Fairway endorsements. Title insurance is widely available on residential transactions, including timeshares. 2

5 In Canada, Australia, parts of Europe, many countries in the Caribbean, and a few other jurisdictions, the registration system is generally conclusive as to ownership of title. Based on that type of real property system, title insurance in Canada covers additional matters on residential transactions, such as: Permits and rights of use (e.g., zoning non-compliance and the lack of required building permits) Restriction, subdivision, and development agreement violation coverage Work orders Gap coverage Access (legal and physical) Usury (lender) coverage, which is also available on commercial transactions by endorsement Location coverage (address and improvement) Post-policy coverage for title (and for the lender, building permit) matters, including loss of title because of adverse unauthorized registration (a major form of title insurance protection in those countries with constitutive or conclusive registration systems that may register title in a third party without agreement of the insured Survey coverage (generally without a survey on residential property for owner s and lenders, and on large commercial loan transactions of up to $10,000,000 to $50,000,000). Survey coverage is also available on larger transactions. Similar coverage is available in Australia. In Europe, countries like Austria and Germany have also opted for the constitutive system, in contrast to France and other nations, where the recordation is declaratory and not conclusive. The coverage for post-policy loss of title based on a fraudulent registration of adverse rights can be valuable in countries with a constitutive system, and can temper one of the more significant theoretical risks of the registration system. That kind of coverage may be secured in Canada, Australia, and Europe, and may consist of the post-policy forgery coverage that appears in Expanded Coverage Policies. An additional coverage that could be separately given to lenders on some residential transactions (as has been done in some mortgage impairment products in the United States) is insurance against postpolicy real estate tax liens (extended tax coverage). With the absence of a tax escrow, this could be a vital coverage to protect the insured s mortgage. In some jurisdictions in Europe, and particularly in the United Kingdom, title insurance on commercial transactions often takes the form of Defective Title Indemnities, which insure against specific, known outstanding matters, such as restrictions, easements, lack of access, permit issues, other encumbrances or defects in title, or small gaps between tracts. Coverage is typically contingent upon the agreement of the insured not to disclose the insurance to third parties. Coverage also inures to the benefit of the named party and any successors or mortgagees. Policies will commonly insure pedestrian and vehicular access, although vehicular access may be insured only if there are parking structures on the land. Policies often insure building approvals and insure against overriding interests such as taxes and possession (as defined and excepted in the Land Registration Act). The title insurance sometimes provides coverage of defined consequential damages. For example, some European policies, such as those by London and European Title Insurance Services Limited, agree to pay such damages if the claim is not removed or remedied within six months after receipt of a proof 3

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