ALTA BEST PRACTICES POLICIES AND PROCEDURES

This Company mission is to guide and train our management/employees on best practices to protect consumers, promote quality service, provide for ongoing employee training, and meet legal and market requirements. These practices are mandatory and designed to help our management/employees illustrate to consumers and clients the industry’s professionalism and best practices to help ensure a positive and compliant real estate settlement experience.

Best Practices

1. Best Practice: Establishing and maintaining current License(s) as required to conduct the business of title insurance and settlement services.

Purpose: Maintaining state mandated insurance licenses and corporate registrations (as applicable) helps ensure Company remains in good standing with the state.

Procedures to meet this best practice:

• Establish and maintain applicable business License(s).

• Establish and maintain compliance with Licensing, registration, or similar requirements with the applicable state regulatory department or agency.

• Establish and maintain appropriate compliance with ALTA’s Policy Forms Licensing requirement.

2. Best Practice: Adopting and maintaining appropriate written procedures and controls for Escrow Trust Accounts allowing for electronic verification of reconciliation.

Purpose: Appropriate and effective escrow controls and staff training help title and settlement companies meet client and legal requirements for the safeguarding of client funds. These procedures help ensure accuracy and minimize the exposure to loss of client funds. Settlement companies may engage outside contractors to conduct segregation of trust accounting duties.

Procedures to meet this best practice:

• Escrow funds and operating accounts are separately maintained. o Escrow funds or other funds Company maintains under a fiduciary duty to another are not commingled with Company’s operating account or an employee or manager’s personal account.

• Escrow Trust Accounts are prepared with Trial Balances. o On at least a monthly basis, Escrow Trust Accounts are prepared with Trial Balances (“Three-Way Reconciliation”), listing all open escrow balances.

• Escrow Trust Accounts are reconciled. o On at least a daily basis, reconciliation of the receipts and disbursements of the Escrow Trust Account is performed.

o On at least a monthly basis, a Three-Way Reconciliation is performed reconciling the bank statement, check book and Trial Balances.

o Segregation of duties is in place to help ensure the reliability of the reconciliation and reconciliations are conducted by someone other than those with signing authority.

o Results of the reconciliation are reviewed by management and are accessible electronically by Company’s contracted underwriter(s).

• Escrow Trust Accounts are properly identified. o Accounts are identified as “escrow” or “trust” accounts. Appropriate identification appears on all account-related documentation including bank statements, bank agreements, disbursement checks and deposit tickets.

• Outstanding file balances are documented.

• Transactions are conducted by authorized employees only. o Only those employees whose authority has been defined to authorize bank transactions may do so. Appropriate authorization levels are set by Company and reviewed for updates annually. Former employees are immediately deleted as listed signatories on all bank accounts.

• Unless directed by the beneficial owner, Escrow Trust Accounts are maintained in Federally Insured Financial Institutions.

• Utilize Positive Pay or Reverse Positive Pay, if available in the local marketplace, and have policies and procedures in place that prohibit or control the use of Automated Clearing House transactions and international wire transfers.

• Background Checks are completed in the hiring process. At least every three years, obtain Background Checks going back five years for all employees who have access to customer funds.

• Ongoing training is conducted for employees in management of escrow funds and escrow accounting.

3. Best Practice: Adopting and maintaining a written privacy and information security program to protect Non-public Personal Information as required by local, state and federal law.

Purpose: Federal and state laws (including the Gramm-Leach-Bliley Act) require title companies to develop a written information security program that describes the procedures they employ to protect Non-public Personal Information. The program must be appropriate to Company’s size and complexity, the nature and scope of Company’s activities, and the sensitivity of the customer information Company handles. A Company evaluates and adjusts its program in light of relevant circumstances, including changes in Company’s business or operations, or the results of security testing and monitoring.

Procedures to meet this best practice:

• Physical security of Non-public Personal Information. o Restrict access to Non-public Personal Information to authorized employees who have undergone Background Checks at hiring.

o Prohibit or control the use of removable media.

o Use only secure delivery methods when transmitting Non-public Personal Information.

• Network security of Non-public Personal Information. o Maintain and secure access to Company information technology

o Develop guidelines for the appropriate use of Company information technology.

o Ensure secure collection and transmission of Non-public Personal Information.

• Disposal and maintenance of Non-public Personal Information. o Federal and state laws require Companies that possess records containing Non-public Personal Information to maintain and dispose of such records (including electronically-stored records) in a manner that protects against unauthorized access to or use of the Non-public Personal Information.

o Companies must securely maintain and dispose of records containing Non-public Personal Information pursuant to an established timeframe for retaining records, as

documented in Company’s information security program, that takes into consideration the appropriate legal, regulatory, and business requirements.

Establish a disaster management plan.

• Appropriate management and training of employees to help ensure compliance with Company’s information security program.

• Oversight of service providers, including third-party signing professionals, to help ensure compliance with Company’s information security program. o Companies should take reasonable steps to select and retain service providers that are capable of appropriately safeguarding Non-public Personal Information.

• Audit and oversight procedures to help ensure compliance with Company’s information security program. o Companies should review their privacy and information security procedures to detect the potential for improper disclosure of confidential information.

• Notification of security breaches to customers and law enforcement. o Companies should post the privacy and information security program on their websites or provide program information directly to customers in another useable form. When a breach is detected, Company should have a program to inform customers and law enforcement as required by law.

4. Best Practice: Adopting standard real estate settlement procedure

and policies that help ensure compliance with Federal and State Consumer Financial Laws as applicable to the Settlement process.

Purpose: Adopting appropriate policies and conducting ongoing employee training helps ensure Company can meet state, federal, and contractual obligations governing the Settlement.

Procedures to meet this best practice:

• Recording procedures. o Review legal and contractual requirements to determine Company obligations to record documents and incorporate such requirements in its written procedures.  Submit or ship documents for recording to the county recorder (or equivalent) or the person or entity responsible for recording within two (2) business days of the later of (i) the date of Settlement, or (ii) receipt by Company if the Settlement is not performed by Company.

 Track shipments of documents for recording.

 Ensure timely responses to recording rejections.

 Addressing rejected recordings to prevent unnecessary delay.

 Verify that recordation actually occurred and maintain a record of the recording information for the document(s).

• Pricing procedures. o Maintain written procedures to help ensure that customers are charged the correct title insurance premium and other rates for services provided by Company. These premiums and rates are determined by a mix of legal and contractual obligations.  Utilize rate manuals and online calculators, as appropriate, to help ensure correct fees are being charged for title insurance policy premiums, state-specific fees and endorsements.

 Ensure discounted rates are calculated and charged when appropriate, including refinance or reissue rates.

 Quality check files after Settlement to help ensure consumers were charged the company’s established rates.

 Provide timely refunds to consumers when an overpayment is detected.

• Third-party signing professional procedures. o Maintain written procedures to help ensure that third-party signing professionals, including notaries public, engaged by the Company possess the appropriate qualifications, professionalism, and knowledge, including the standards described below. These requirements are determined by a mix of legal and contractual obligations.  Verify that the third-party signing professional is covered by:

i. Errors and Omissions insurance, and

ii. Notary surety bond, if required by state law; and

 Require that third-party signing professionals: i. Furnish evidence of their current state licensure, where required, or evidence if they have attained a recognized and verifiable industry designation, and;

ii. Provide an acknowledgement of compliance with Company’s instructions and Company’s information security program as detailed in Pillar 3 of these Best Practices.

 *NOTE: If a third-party signing professional is directly employed by a title or settlement agent or underwriter that provides evidence of compliance with the Best Practices, Company does not need to perform the due diligence requirements outlined in this section of the ALTA Best Practices.

o In the event that a third-party signing professional is contractually retained by anyone other than Company (including the buyer or seller), the responsibility for verifying that the third-party signing professional meets applicable standards rests with that party.

5. Best Practice: Adopting and maintaining written procedures related to title policy production, delivery, reporting and premium remittance.

Purpose: Adopting appropriate procedures for the production, delivery, and remittance of title insurance policies helps ensure title companies can meet their legal and contractual obligations.

Procedures to meet this best practice:

• Title policy production and delivery. o Title insurance policies are issued and delivered to customers in a timely manner to meet statutory, regulatory or contractual obligations.  Issue and deliver policies within thirty days of the later of (i) the date of Settlement, or (ii) the date that the terms and conditions of title insurance commitment are satisfied.

• Premium reporting and remittance. o Title insurance policies are reported to the underwriter (including a copy of the policy, if required by the underwriter) to meet applicable statutory, regulatory and contractual obligations, but not to exceed 45 days following the (i) date of Settlement, or (ii) date the terms and conditions of the title insurance commitment are satisfied.

o Title insurance premiums are remitted to the underwriter to meet applicable statutory, regulatory and contractual obligations.

6. Best Practice: Maintaining appropriate professional liability insurance and fidelity coverage.

Purpose: Appropriate levels of professional liability insurance or errors and omissions insurance help ensure title agencies and settlement companies maintain the financial capacity to stand behind their professional services. In addition, state law and title insurance underwriting agreements may require a company to maintain professional liability insurance or errors and omissions insurance, fidelity coverage or surety bonds.

Procedures to meet this best practice:

• Company maintains professional liability insurance or errors and omissions insurance.

• Company complies with requirements for professional liability insurance, errors and omissions insurance, fidelity coverage or surety bonds, as provided by state law or title insurance underwriting agreements.

7. Best Practice: Adopting and maintaining written procedures for resolving consumer complaints.

Purpose: A process for receiving and addressing consumer complaints helps ensure reported instances of poor service or non-compliance do not go undiscovered.

Procedures to meet this best practice:

• Consumer complaint intake, documentation and tracking. o Standard procedures for logging and resolving consumer complaints helps ensure consumers provide company with sufficient information to understand the nature and scope of the complaint.  Develop a standard consumer complaint form that identifies information that connects the complaint to a specific transaction.

 Set a single point of contact for consumer complaints.

 Establish procedures for forwarding complaints to appropriate personnel.

 Maintain a log of consumer complaints that includes whether and how the complaint was resolved.