# Title 26.1 — Insurance

## Chapter 26.1-20 — Title Insurance Companies

### § 26.1-20-01. Title insurance company subject to insurance company requirements.

Every domestic or foreign corporation organized for the purpose of insuring titles to real
property in this state or of insuring against loss by reason of defective titles thereto, or
encumbrances thereon, is subject to and shall comply with all the requirements of the laws of
this state made applicable to insurance companies generally and the rules of the commissioner,
except as provided in this chapter or when the laws and rules are inconsistent with this chapter.
### § 26.1-20-02. Capital stock and surplus requirement.

A domestic corporation organized for the purpose of insuring titles to real property in this
state or of insuring against loss by reason of defective titles to real property, or encumbrances
on real property, may not be incorporated unless it has an authorized capital of not less than five
hundred thousand dollars and a surplus of not less than five hundred thousand dollars if a stock
company, and a surplus of not less than five hundred thousand dollars if a mutual company. If
the capital or surplus requirements at the time the company was incorporated under this chapter
were less than the minimum requirements provided by this section, the company may maintain
authorized capital or surplus which satisfies the capital stock or surplus requirements in effect at
that time. It may issue no policy or insurance until at least fifty percent of the minimum capital
stock required by this section, and all the surplus required, have been paid in, the residue of
capital stock to be paid in within twelve months from the time of filing the articles of
incorporation, but the commissioner, for good cause shown, may extend the time of payment of
the residue for the further period of one year.
### § 26.1-20-03. Surplus to constitute guaranty fund - Deposit.

The surplus provided for in section 26.1-20-02 constitutes a guaranty fund, which must be
invested in securities as provided by section 26.1-05-19, and be duly deposited with the
commissioner, and the commissioner's certification of that deposit must be procured, as
provided by law. This deposit must be maintained unimpaired and the principal of the fund may
be applied only to the payment of losses and expenses by reason of its guaranty and insurance
contracts, but the corporation has the right to collect the income from the deposit and to
substitute other like securities of equal amount and value from time to time.
### § 26.1-20-04. Limitation on risks.

1. Except as provided in subsection 2, a title insurance company may issue a title
insurance policy on property located in this state involving a potential policy liability up
to ninety percent of the sum of the company's surplus as regards policyholders and
statutory premium reserves as stated in the most recent annual statement of the
company.
2. A title insurance company may exceed the limit established in subsection 1 if the
excess liability is reinsured in due course with an authorized title insurance company
or in compliance with subsection 3 or 4.
3. Notwithstanding contrary provisions of this section, a title insurance company may
acquire reinsurance on an individual policy or facultative basis from a title insurance
company not authorized to engage in the business of title insurance in this state if the
title insurance company from which the reinsurance is acquired:
a. Has a combined capital and surplus of at least twenty million dollars as stated in
the company's most recent annual statement preceding the acceptance of
reinsurance; and
b. Is domiciled in another state and is authorized to engage in the business of title
insurance in one or more states.
4. Notwithstanding contrary provisions in this section, a title insurance company may
obtain reinsurance by a reinsurance treaty or other reinsurance agreement from an
assuming insurer with a financial strength rating of B+ or better from the A.M. Best

Company, Inc., or with an alternative rating the commissioner may approve which the
commissioner determines is an equivalent rating by another recognized rating
organization.
### § 26.1-20-05. Title evidence - Examination.

A domestic corporation organized for the purpose of insuring title to real property in this
state or of insuring against loss by reason of defective titles to real property, or encumbrances
on real property, or a foreign corporation authorized to do business in this state, may not issue
any policy, binder, or certificate unless it has secured from a person, firm, or corporation holding
a certificate of authority under chapter 43-01 the record title evidence of the title to be insured,
and the title evidence has been examined by a person duly admitted to the practice of law as
provided by chapter 27-11. The certificate of authority of any corporation violating this section
must be revoked as provided by chapter 26.1-02 or 26.1-11.
### § 26.1-20-06. Judgment against corporation - Enforcement.

If a corporation fails to satisfy any judgment against it arising out of its liability under any title
insurance policy, issued, insured, or assumed by it, within thirty days after the finality of the
judgment becomes fixed, the judgment may be enforced against its guaranty fund deposit
through the following procedure:
1. The judgment creditor shall petition the court wherein the judgment is entered and as
part of the same cause, truthfully setting forth the facts regarding the failure to satisfy
the judgment as required by this section.
2. Upon the petition the court shall direct the issuance of a special execution directed to
the sheriff of Burleigh County, requiring that the sheriff sell so much of the securities on
deposit as may be required to satisfy the judgment and pay the costs of the levy.
3. The special execution must be executed by the sheriff by delivering to the state
treasurer and to the commissioner a certified copy of the writ of execution together
with a certified copy of the judgment and of the petition and order, and within ten days
thereafter there must be delivered to the sheriff sufficient securities to satisfy the
judgment in full. The sheriff shall sell the securities upon execution as in the case of
sales of personal property upon execution generally.
