Tennessee Title Insurance Producer Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Tennessee Title Insurance Producer bond (otherwise referred to as a Title Insurance Agent bond).
At a Glance:
- Lowest Cost: $100 per year or $10 a month
- Bond Amount: $25,000
- Who Needs It: All title insurance producers operating in Tennessee
- Purpose: To protect the public from financial harm if the title insurance producer commits fraud or engages in unfair business practices
- Who Regulates Title Insurance Producers in Tennessee: The Tennessee Department of Commerce and Insurance
Background
Tennessee Code Annotated 56-35-201 requires all title insurance producers operating in the state to obtain a license from the Department of Commerce and Insurance. The Tennessee Legislature enacted the licensing requirement to ensure that title insurance producers do not engage in unethical business practices. To provide financial security for the enforcement of the licensing law, title insurance producers must purchase and maintain a $25,000 surety bond to be eligible for licensure.
What Is the Purpose of the Tennessee Title Insurance Producer Bond?
Tennessee requires all title insurance producers to purchase a surety bond as part of the application process to obtain a license. The bond ensures that restitution is available to any damaged party should the title insurance producer fail to abide by the regulations outlined in the Tennessee Code Annotated Title 56, Chapter 35. Specifically, the bond protects claimants if the title insurance producer commits fraud or engages in unfair business practices. In short, the bond is a type of insurance that protects the public if the title insurance producer violates the terms of their license.
How Can an Insurance Agent Obtain a Tennessee Title Insurance Producer Bond?
BondExchange makes obtaining a Tennessee Title Insurance Producer bond easy. Simply log in to your account and use our keyword search to find the “title insurance producer” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the Tennessee Title Insurance Producer Bond?
Surety companies will run a credit check on the title insurance producer to determine eligibility and pricing for the Tennessee Title Insurance Producer bond. Title insurance producers with excellent credit and work experience can expect to receive the best rates. Title insurance producers with poor credit may be declined by some surety companies or have to pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the applicant’s credit.
How Much Does the Tennessee Title Insurance Producer Bond Cost?
The Tennessee Title Insurance Producer bond can cost between $100 to $1,500 per year or $10 to $150 per month. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below briefly references the approximate bond cost on the $25,000 bond requirement.
$25,000 Tennessee Title Insurance Producer Bond Cost
| Credit Score* | Bond Cost (1 Year) | Bond Cost (1 month) |
|---|---|---|
| 720+ | $100 | $10 |
| 680 – 719 | $113 | $12 |
| 660 – 679 | $175 | $18 |
| 649 – 659 | $250 | $25 |
| 629 – 648 | $375 | $38 |
| 600 – 628 | $625 | $63 |
| 580 – 599 | $875 | $88 |
| 550 – 579 | $1,000 | $100 |
| 525 – 549 | $1,250 | $125 |
| 500 – 525 | $1,500 | $150 |
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
How Does Tennessee Define “Title Insurance Producer”?
To paraphrase Tennessee Code Annotated 56-35-102, a title insurance producer is a person who solicits, procures, or negotiates title insurance contracts. This includes providing escrow, closing, or settlement services.
Exemptions to this definition include the following:
- Officers, directors, or employees of an insurer who do not receive any commission on policies written or sold
- Individuals who perform administrative services related to mass-marketed property and casualty insurance provided that no commission is paid to the individual for the services
- Persons whose activities in the State are limited to advertising without the intent to solicit insurance in the State through communications in printed publications or other forms of electronic mass media
- A person who is not a resident of the State who sells, solicits, or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state insured under the contract
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How Do Title Insurance Producers Become Licensed in Tennessee?
Title insurance producers in Tennessee must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the Department’s Agent/Producer Licensing webpage for details on the process.
License Period – Tennessee title insurance producer license must be renewed with the Department of Commerce and Insurance every two years.
Step 1 – Purchase a Surety Bond
Tennessee title insurance producers must purchase and maintain a $25,000 surety bond.
Step 2 – Pass Examination
Title insurance producer license applicants who are not practicing attorneys must pass a written title insurance examination. Further details regarding the exam and an exam handbook can be found here.
Step 3 – Submit License Application
Title producer license applications must be completed and submitted through the National Insurance Producer Registry (NIPR). A non-refundable application fee is also required.
How Do Title Insurance Producers in Tennessee Renew Their Licenses?
Tennessee title insurance producer licenses must be renewed with the Department of Commerce and Insurance every two years. Renewal applications and fees ($60) are submitted online via the NIPR website.
What Are the Insurance Requirements for Title Insurance Producers in Tennessee?
Tennessee does not require title insurance producers to purchase any form of liability insurance as a prerequisite to obtaining a license. Title insurance producers must purchase and maintain a $25,000 surety bond.
How Do Tennessee Title Insurance Producers File Their Bonds?
Title insurance producers in Tennessee should submit their completed bond forms, including the power of attorney, electronically when submitting their license applications. The surety bond requires signatures from the surety company and the title insurance producer. The surety company should include the following information on the bond form:
- Legal name and address of the individual buying the bond
- Surety company’s name
- Date the bond is signed
What Can Tennessee Title Insurance Producers Do to Avoid a Claim Against Their Surety Bond?
To avoid claims against their bonds, title insurance producers in Tennessee must follow all license regulations in the State, including some of the most important issues below that tend to cause claims:
- Misrepresentation
- Unethical business practices
- Fraud
What Other Insurance Products Can Agents Offer Title Insurance Producers in Tennessee?
Most reputable title insurance producers will purchase business liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Tennessee Title Insurance Producer Customers?
Tennessee conveniently provides a public database to search for active title insurance producers in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
