S. 3565(Seward)/A. 11252(Morelle)

Title Insurance Agents

Summary:  The bill provides for the licensure of title insurance agents by the Department.  Specifics include:

• Section 2101(k) of the Insurance Law is amended to expand the definition of "insurance producer" to include "title insurance agent."

• Section 2101 of the Insurance Law is amended to add a new subsection (s) to define the term "title insurance agents.”

• Section 2103(b) of the Insurance Law is amended to authorize the Superintendent to issue licenses to title insurance agents.

• Section 2103(c) of the Insurance Law is amended to authorize the Superintendent to issue a title insurance agent license to a firm or association and its sublicensees. Any sub-licensee would only be authorized to act in the name of the licensee. In the case of a license issued to a title insurance agent, at least one designated sublicensee must have a financial or other beneficial interest in the license.

• Section 2103(e) of the Insurance Law is amended to require the filing of an application before a title insurance agent's license may be issued.

• Section 2103(f)(2)(B) of the Insurance Law is amended to increase from six to seven the number of licensing exams the Superintendent may prescribe so that the Department can test those seeking to become licensed as a title insurance agent.

• Section 2103(g)(7) of the Insurance Law is amended to waive the written exam requirement for an applicant who has passed the title insurance agent exam and who was licensed as a title insurance agent, provided that the applicant applies for the license within two years following the termination of his license.

• Section 2103(g) of the Insurance Law is amended to exempt attorneys from the written exam requirement in order to become licensed as a title insurance agent.

• Section 2103(h) of the Insurance Law is amended to permit the Superintendent to refuse to issue a title insurance agent's license if in the Superintendent's judgment the applicant is not trustworthy and competent, or has given cause for the revocation or suspension of such license, or has not complied with any prerequisite for the issuance of a title insurance agent's license.

• Section 2103(j)(5) of the Insurance Law is amended to require title insurance agent's to file a renewal application and pay the prescribed fee before their license may be renewed.

• Section 2l03(j)(8)(A) of the Insurance Law is amended to authorize the Superintendent to dispense with the requirements for a renewal application of a title insurance agent's license for military personnel who are unable to make a personal application for such license.

• Section 2103(j)(12) of the Insurance Law is amended to permit a licensee to amend their license without having to pay the required fee.

• Section 2103(1) of the Insurance Law is amended to permit title insurance agents to apply for an additional license authorizing them or sub-licensee to act as insurance agents for additional insurers.

• Two new subsections are added to Section 2103 of the Insurance Law to provide a licensing mechanism for those currently acting as title insurance agents.

• Section 2109(a) of the Insurance Law is amended to authorize the Superintendent to issue a temporary title insurance agent's license.

• Section 2109(c) of the Insurance Law is amended to permit a title insurance agent who is issued a temporary license to use such license to renew existing business, to collect premiums due, and to perform such other acts as are incidental to the continuance of the insurance business.

• Subsections (a) and (d) of Section 2112 of the Insurance Law are amended to require title insurance companies file a certificate of appointment in order to appoint a title insurance to act on its behalf.

• Section 2115 of the Insurance Law is amended to make the section applicable to title insurance agents and to prohibit a title insurance company or any of its representatives from paying any compensation except to a licensed title insurance agent.

• Sections 2120(a) and 2120(c) of the Insurance Law are amended to require title insurance agents to act in a fiduciary capacity for any funds received or collected as a title insurance agent.

• Section 2122(a) of the Insurance Law is amended to prohibit a title insurance agent from: 1) advertising the financial condition of an insurer unless the advertising conforms with the requirements of Section 1313 of the Insurance Law; and 2) calling attention to any unauthorized insurer.

• Section 2128(a) and Section 2128(b) of the Insurance Law are amended to prohibit title insurance agents from receiving any commissions or fees in connection with coverages placed for or services rendered with various governmental entities unless they actually placed coverage or rendered services to the governmental entity.

• Section 2132(b) of the Insurance Law is amended to exempt attorneys from the continuing education requirements for title insurance agents.

• A new Section 2137 of the Insurance Law is added to prohibit anyone who holds a financial interest in a title insurance agency or title insurance company from referring business to that agency or company unless certain conditions are met.

• Section 305(b) of the Insurance Law is amended to prohibit a title insurance agent and its officers, directors and employees, whose conduct, condition or practices are being investigated from being entitled to witness or mileage fees.

• The bill requires the Superintendent to promulgate application forms for title insurance agent licensing.

• The bill allows persons, firms and corporations who have filed an application for a title insurance agent license on or before January 1, 2008, or within 90 days after the Superintendent has promulgated application forms pursuant to this act, whichever is later, to act as such agent without a license until the Superintendent has made a final determination on the application for such license.

Effective Date:  N/A.

Last Action: The bill was referred to the Assembly Insurance Committee on January 24, 2008.