Owners Title Policy - not required

We do not require an owner's title policy for a lot purchase loan. We have a borrower whose seller has agreed to pay for an owner's title policy for our guys at closing. The title company wants us to include the premium on our closing disclosure.

(1) Where does the seller paid policy premium go on the closing disclosure? It's not a required cost for our loan.
(2) Do we have to disclose it on our closing disclosure just because the title company says so?

OTI should be disclosed as optional to the borrower on every purchase money transaction. I'm not sure when or why a lender would require OTI. If you new the seller was going to pay it before issuing the LE, you would leave it off of the LE and disclose the seller paid OTI cost on Page 3 in the seller's transaction of the CloD.