NM Insuring Around Endorsement Guideline 43

Explanation:

This endorsement is designed to affirmatively insure over or around a lien or matter excepted to in Schedule B.

It may be issued with a Loan Policy, an Owner's Policy, a Construction Loan Policy, a Leasehold Loan Policy, or a Leasehold Owner's Policy.
This endorsement may be used only where one or more of the circumstances described in the regulation exists at the time the Policy is issued.
The regulations provide that this endorsement may be used in cases where (1) a lien has been paid but the release has not been recorded , (2) a policy was previously issued without an exception to a matter because of a mistake, (3) pursuant to an indemnity or agreement to defend an exception was not taken in a prior policy, and an insurer is asked to insure a new policy, or (4) a subsequent insurer discovers the error or the omitted matter, and relys upon an indemnity agreement from the prior insurer.

Procedure: See Regulation 13 NMAC 14.8.13.

Underwriting Requirements:

(1) In the case of an unreleased lien, the agent has evidence in its file that the lien has been fully paid, and the agent has requested a release.

(2) Where a policy has previously been issued, but because of a mistake or error, or pursuant to an indemnity, an exception was not taken to a lien or other adverse matter, and the agent is requested to issue another policy then the agent must:

(a) Obtain underwriting approval,

(b) In case of an error or mistake, review with underwriting personnel the appropriate manner for handling the mistake or error.

(3) Where another insurer or its agent has erred or issued a prior policy without exception to a lien or adverse matter and offers an indemnity, then

(a) Rely only on an indemnity from an insurer, not a title agent;

(b) If the other insurer's indemnity is limited to its policy amount and that amount is significantly less that of the proposed policy, then obtain underwriting approval of the indemnity.

(c) Scrutinize the other insurer's indemnity for limitations or restrictions on it's liability and if significant, obtain underwriting approval of the indemnity.