Section 114 of chapter 175 of the General Laws, as appearing in the 2016 Official Edition, is hereby amended by adding the following paragraph:-
A company organized under the eleventh clause of section 47 may issue closing protection in the form of a closing protection letter to proposed insureds upon request, provided that the company or its title agent issues a preliminary report, insurance binder or title insurance policy for the same real estate transaction. A closing protection letter issued by such a company shall be required in connection with the issuance of any loan policy insuring a lender's interest in residential property intended for residential occupancy containing 4 or less units. A closing protection letter shall be in a format adopted from time to time by the American Land Title Association. It shall not be the subject of any agreement requiring a division of the fee collected on behalf of the title insurance company. For purposes of this paragraph, “closing protection letter” shall mean an indemnification or undertaking to a party to a real property transaction, from a principal such as a title insurance company, setting forth in writing the extent of the principal’s responsibility for intentional misconduct or errors in closing the real property transaction on the part of a settlement agent, such as a title insurance agent or other settlement service provider.
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