The Pronghorn Press - Issue 3

2016 | ISSUE 3

The

Pronghorn Press ~ A WYOMING AGENCY NEWSLETTER ~

ALIEN INVASION? By: Justin Lischak Earley, VP, Corporate Underwriting

Have you recently had an encounter with an EBE? No, we aren’t talking about extraterrestrial biological entities; we’re talking about exotic business entities! In the past few years, new and strange forms of artificial persons have begun to appear in real estate transactions. Some examples include series LLCs, statutory business trusts, family limited partnerships, and asset protection trusts. Often, these creatures were engineered in the legislative laboratories in one state (Delaware, Texas, Wyoming, etc.), but the parties to the transaction want to use these creatures for a real estate transaction in a state different than the one that created them.

EBEs create a number of problems for title insurance underwriters. In situations where we are being asked to insure the EBE or a lender on the title purportedly owned by an EBE, it can be difficult to determine whether the EBE is capable of holding title in a state outside of its creation. If the EBE is already in title, it can be difficult to know whether a court may brush aside the separate existence of the EBE and permit liens and other encumbrances to attach to the property. And when the EBE is selling or mortgaging the property, it can be particularly challenging to sort out authority issues regarding the EBE.

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In This Issue Alien Invasion?

Cyber Fraud & Cyber Crime Insurance

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Title Agents Only First American Comprehensive Calculator (FACC)

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Wyoming Wanders and Wonders

Our office will be closed in observance of the following 2016 holidays: THANKSGIVING DAY Thursday, November 24th THANKSGIVING DAY HOLIDAY Friday, November 25th

CHRISTMAS HOLIDAY Monday, December 26th

So, what to do? If you have a transaction involving a business entity that is out of the ordinary, reach out to underwriting early in the transaction for guidance. Armed with the right knowledge, you can stop your world from being invaded by EBEs.

The information contained in this document was prepared by First American Title Insurance Company (“FATICO”) for informational purposes only and does not constitute legal advice. FATICO is not a law firm and this information is not intended to be legal advice. Readers should not act upon this without seeking advice from professional advisers. First American Title Insurance Company makes no express or implied warranty respecting the information presented and assumes no responsibility for errors or omissions. First American, the eagle logo, First American Title, and firstam.com are registered trademarks or trademarks of First American Financial Corporation and/or its affiliates.

AMD: 09/2016

©2016 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF

CYBER FRAUD CYBER CRIME I N S U R A N C E

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Virtually every business now uses the Internet for email, social media and desktop publishing. In a data-driven world, businesses of all sizes have had cyber security breaches, whether the result of cyber-attacks, cyber crime, or internal carelessness. For many businesses, it is not a question of if it will happen, but when it will happen.

There are various types of insurance available to help protect title insurance and escrow agents against cyberattacks, data breaches, and cyber crime. Below is a brief summary of the types of insurance that may be available to pay losses associated with cyber fraud and cyber crime.

INSURANCE AVAILABLE TO TITLE INSURANCE AND ESCROW AGENTS 1. Cyber Liability Insurance: This type of insurance covers your liability for third-party financial loss due to a hacking attack or virus from your computer system, including the following types of liability/loss: a. Privacy Liability: Covers your liability due to a security breach resulting in breach of personally identifiable information and your failure to provide timely notification. b. System Damage: Pays the costs you incur of restoring or replacing your computer programs or data and costs for repairing, restoring or replacing your computer systems.

d. Consequential Reputational Harm: Reimburses you for reduction in profit because of damage to your reputation from an outage or security breach. e. Regulatory Actions/Investigations: Covers the costs you incur due to regulatory investigation of an actual or suspected breach of privacy. f. Privacy Breach Notification Costs: Pays expenses involved in third-party notification of actual or suspected breach of privacy, credit monitoring services, and investigation of your computer system.

c. System Business Interruption: Covers your reduction in profit during a system outage period as a direct result of a cyber peril.

First American Title | The Pronghorn Press | 2016 - Issue 3

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CY B E R F R A U D & CY B E R C R IM E IN S U R A N C E

2. Cyber Crime Insurance: Provides protection against loss if your escrow accounts are hacked into and funds are stolen. It would also provide protection against loss due to wire fraud through social engineering (i.e., an employee is deceived into transferring funds to a fraudulent bank account).

3. Cyber Threats and Extortion Insurance: Pays costs incurred resulting from threats made to prevent access to your computer system, introduce viruses, reveal confidential information or damage your reputation.

4. Professional Liability/Errors & Omissions (E&O) Insurance: Covers an error (i.e., that which should not have been done and was) and an omission (i.e., that which should have been done and was not). E&O covers the professional entity and all professional employees for monetary damages to a third-party directly caused by providing or failing to provide professional services.

5. Fidelity Bond: Covers your business against an employee-dishonesty loss, such as embezzlement.

(Continued)

ARE YOU PROTECTED? Most title insurance and escrow agents maintain Professional Liability or E&O Insurance. However, these types of policies may not extend to losses due to a cyber-attack, data breach or cyber crime. Make sure you have the insurance coverage you need.

Ask your Professional Liability or E&O carrier the following questions: 1. Does my policy include Cyber/Data Breach/ Network Security coverage? If so: a. What are the sublimits? b. Does Cyber coverage include coverage such as Funds Transfer Fraud or theft? c. Does Cyber Crime coverage on an E&O or a current stand-alone Cyber Policy include Social Engineering Fraud coverage? (Most policies only include coverage for a hacker accessing a network or computer and accessing the account directly).

2. Does my policy include coverage for Consumer Financial Protection Bureau investigation defense and settlement costs?

3. Does my policy include Employee Dishonesty/ Fidelity coverage? If coverage is included, does coverage extend to Funds Transfer Fraud?

CA License No. 0534607 For additional information, please contact:

Bruce Lucas

866.215.7814 blucas@firstam.com First American Title | The Pronghorn Press | 2016 - Issue 3

www.fapcia.com

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T I T L E A G E N T S O N LY First American Comprehensive Calculator (FACC) Agents should access the First American Comprehensive Calculator created for use by First American Title Agents to ensure they are receiving accurate title quotes on transactions. The agency-specific version* of the FACC includes a Loan Estimate/Closing Disclosure option so you can easily provide quotes for TRID-related purchase and refinance transactions.

TWO WAYS TO ACCESS: »» http://agency.facc.firstam.com/ »» Logon to AgentNet® and select First American Comprehensive Calculator from the dropdown menu under the Helpful Links tab.

Please delete any bookmarks referencing the public-facing version of the FACC and share the new link with your customers: http://agency.facc.firstam.com/ *Title quotes only; closing costs are excluded

First American Title | The Pronghorn Press | 2016 - Issue 3

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WYOMING WANDERS AND WONDERS »»

Scenic byways to view Wyoming’s best fall foliage include Beartooth Highway, Cloud Peak Skyway, Black Hills Scenic Byway, Flaming Gorge – Green River Basin Byway, Red Gulch/Alkali Scenic Backway and Star Valley Scenic Byway.

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In 1906, President Teddy Roosevelt made Devil’s Tower in Crook County the country’s first ever National Monument. Close Encounters of the Third Kind, was filmed on location at Devil’s Tower.

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At 2,219,823 acres, Yellowstone National Park is America’s first and largest national park.

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Wyoming was the stomping ground of countless dinosaurs. Compare your shoes to the footprints of Jurassic-era giants outside Shell at the Red Gulch Dinosaur Track site.

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Bigfoot has been allegedly sighted several times in Wyoming in the Wind River Mountains, Yellowstone, Teton Forest, and Snow King Mountain near Jackson.

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Wyoming has 32 named islands within its state lines, even though it’s a thoroughly landlocked state.

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Where the Oregon Trail passes near Guernsey, WY, there are four-foot deep gouges cut by the wheels of thousands of wagons traveling through from 1841-1869.

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The first Dude Ranch in Wyoming was the Eaton Ranch, near Wolf. The Eaton’s also came up with the term “dude”.

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The horse on the Wyoming license plate has a name, “Old Steamboat.” It is named after a bronco that could not be ridden in the early 1900’s.

First American Title | The Pronghorn Press | 2016 - Issue 3

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