In the August 28, 2009 issue of the Texas Register, the Texas Department of Insurance (TDI) adopted new rules and endorsement forms and modified currently existing rules for mineral interests affecting Texas properties as part of the Basic Manual of Rules, Rates and Forms for the Writing of Title Insurance in the State of Texas (Basic Manual). These procedural rules, rates, and endorsement forms relating to mineral interests become effective November 1, 2009, and are identified as follows: amended Texas Title Insurance Information page; new Procedural Rule P-5.1; amended Procedural Rule P-50; new Procedural Rule P-50.1; new Minerals and Surface Damage Endorsement Form T-19.2; new Minerals and Surface Damage Endorsement Form T-19.3; amended Rate Rule R-29; and new Rate Rule R-29.1. The TDI adopted these new rules and endorsements and modified the currently existing rules relating to mineral interests because the TDI became aware that coverage for mineral interests has varied throughout the state depending on the type of transaction, location of the transaction, local historical custom, and even the type of abstract plant maintained by the title agent. According to the TDI, because of the variance in practice that has existed to date, these new rules and forms and the modification of currently existing rules are necessary to ensure that going forward title insurance coverage for mineral interests will be uniformly handled throughout the state and across varying types of transactions. This memorandum addresses these rules and endorsements and consists of a summary of the new and modified rules and endorsement forms, identified by the item number assigned by the TDI; our comments, if any, for the particular item number summarized; our recommendations; and the text of each new or modified rule and endorsement adopted by the TDI, as follows:

Complete Memorandum