1/26/23 10:46 AM

ALTA Announces Best Practices 4.0

The American Land Title Association (ALTA) published ALTA Best Practices Framework ver. 4.0 with an effective date of May 23, 2023. Title companies can begin implementing the new Framework whenever they are ready, but note that any assessments performed after the effective date should use the 4.0 Framework. 

According to ALTA's announcement of the updated Framework, "As the ALTA Best Practices Framework: Title Insurance and Settlement Best Practices document is the guiding document for agents and direct operations to both optimize and improve their business, these revisions have been made with the specific objective of allowing agents and direct operations to continually improve their practices and procedures to ensure financial, data security and operational stability, and to provide lenders and other constituents with the assurances that their needs are being fulfilled by these efforts."

A number of sections of the Framework received significant updates in this version, including:

  • Pillar 2 (Escrow Accounting): Updates to the treatment of non-settled funds and outstanding file balances, use and treatment of fintech applications, escrow funds training, use of the ALTA Outgoing Wire Preparation Checklist, and the use of wire verification services.
  • Pillar 3 (Privacy and Information Security Programs to protect NPI): Updates to the physical protection of Nonpublic Personal Information (NPI), inclusion of network and cloud security of NPI, further details on coverage of business continuity and disaster recovery plans, further details on the required oversight of service providers and third party systems, use of the ALTA Cybersecurity Incident Response Plan Template as a reference document for the written incident response plan, and requiring processes for addressing breaches or unauthorized access to NPI.
  • Pillar 4 (Settlement): Updates include establishing “consumer objectives” for the training of staff, disclosure of Affiliated Business Arrangements, establishment and implementation of procedures related to closing documents, requirements for internal and external signing professionals, selection of Remote Notarization Platforms, standards for recording procedures, and compliance with Pillar 2 for procedures and controls for recording fees and any applicable taxes.

ALTA has also published a number of supporting documents: the Best Practices Assessment Procedures, which is available to the general public, and the Internal Assessment Report and Letter and the Third-Party Assessment Report, which are only available to ALTA Members and non-members who have purchased access to the Best Practices collection. ALTA will provide additional updated supporting documents, which will provide further guidance in implementing Best Practices, in February.

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Topics: Regulatory and Compliance, Best Practices

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