​​​​DATE: March 16, 2026

TO: All Title Insurers and Title Insurance Producers

RE: Split Settlements Do Not Violate the Insurance Article

­­­­­­­­­­­­­­The Maryland Insurance Administration (“the Administration") issues this bulletin to inform all licensed title insurance producers involved in real estate transactions that the Insurance Article does not prohibit buyers and sellers from using separate settlement service providers to perform certain functions in a real estate settlement.

In a purported "split settlement," the escrow, closing, or settlement responsibilities typically handled by a single settlement agent are divided between two or more individuals or entities. This arrangement can arise from various circumstances but commonly occurs when the buyer and seller each select their own settlement agent. In such cases, the agents divide the responsibilities based on the respective roles of the buyer and seller in the transaction.

For example, the buyer's settlement agent may handle tasks such as receiving and issuing receipts for escrow funds, conducting a title search, verifying documents, issuing title insurance, obtaining buyer's signatures, and disbursing escrow funds. Meanwhile, the seller's settlement agent may prepare the deed, obtain seller's signatures, provide relevant documents to the buyer's agent, and request mortgage payoff figures.

A purported split settlement may also occur when the seller is represented by an attorney, and a separate agreement is in place that requires the buyer's settlement agent to disburse escrow funds such as mortgage payoffs or sale proceeds to the seller's attorney, who will then be responsible for distributing those escrow funds to the appropriate parties as itemized in the settlement documents. 

In Maryland, the buyer has the right to select certain service providers involved in the settlement.  Specifically, Business Occupations & Professions, § 17-524 provides in part:

(a) Each real estate contract submitted to a party by a real estate broker, an associate real estate broker, or a real estate salesperson for use in the sale of a single-family dwelling shall contain, in bold-faced type, a statement that the buyer has the right to select the buyer's own:

(1) title insurance company; 

(2) settlement company;

(3) escrow company;

(4) mortgage lender, or financial institution as defined in the Financial Institutions Article; or

(5) title lawyer.

Maryland law does not contemplate a buyer and a seller each having their own title insurance producers.  Moreover, the Maryland Insurance Administration does not envision a scenario where the service providers selected by the buyer (title company, settlement company, escrow company) could delegate their responsibilities to a person selected by the seller.

In the event that the seller in a transaction decides to hire persons to provide services relative to the settlement or closing, the Administration would look closely to determine the scope of work and whether the services to be provided by entities selected by the seller are duplicative. Any licensed title insurance producer who provides and charges for superfluous services in connection with a settlement or closing would be subject to an investigation and possible enforcement action pursuant to, inter alia, § 10-126(a)(13).

Should you have any questions concerning this Bulletin, please contact Maryam David, Chief Title Enforcement Officer at [email protected]

MARIE GRANT
Commissioner

 By: Signature on Original

Robert Guynn
Associate Commissioner
Fraud and Enforcement Division