Title Insurance Agent Licensing - Frequently Asked Questions
Q1. Who must obtain a title insurance agent license?
- A1. Any person or business entity that acts as a title insurance agent in New York must be licensed as such. Insurance Law section 2101(y) defines "title insurance agent" as any authorized or acknowledged agent of a title insurance corporation, and any subagent or other representative of such an agent, who or which for commission, compensation, or any other thing of value, performs the following acts in conjunction with the issuance of a title insurance policy:
- sells or negotiates the sale of a title insurance policy; and
- evaluates the insurability of title, based upon the performance or review of a title search; and
- performs one or more of the following functions:
- collects, remits, or disburses title insurance premiums, escrows, or other related funds;
- prepares, amends, marks up, or delivers a title insurance commitment or certificate of title for the purpose of the issuance of a title insurance policy by a title insurance corporation;
- prepares, amends, or delivers a title insurance policy on behalf of a title insurance corporation; or
- negotiates the clearance of title exceptions, in connection with the issuance of a title insurance policy.
A person or business entity that does not engage in the activities specified above in item 1, item 2, and one of the activities in item 3 in a particular transaction need not be licensed as a title insurance agent.
An individual who engages in the activities specified in Insurance Law section 2101(y) must be licensed either individually as a title insurance agent or must be a sublicensee on behalf of a business entity that is licensed as a title insurance agent.
A business entity that engages in the activities described in Insurance Law section 2101(y) must be licensed as a title insurance agent. Every business entity must operate through at least one sublicensee but may have more than one sublicensee. Every sublicensee of a business entity must be a natural person who meets all of the qualifications to be licensed individually as a title insurance agent.
In addition, a business entity may employ licensed title insurance agents who are not sublicensees. An individual who is not an officer, director, partner, member, or manager, as appropriate, of an entity that is applying for a license must obtain an individual license as a title insurance agent. An individual may be licensed both individually and as a sublicensee of a business entity. An individual may be a sublicensee of more than one business entity.
If a business entity maintains more than one office, then each office must be in the charge of at least one supervising person. A supervising person may not be responsible for more than one office that is open at the same time except under limited circumstances. The supervising person must be licensed either as a sublicensee of the business entity or individually as a title insurance agent.
Q2. Who may be a sublicensee of a business entity?
- A2. At least one sublicensee must have a financial or other beneficial interest in the business entity and each business entity must have at least one sublicensee. A sublicensee must be an officer or director if the business entity is a corporation; a partner, if the business entity is a partnership or limited liability partnership; or a member or manager, if the business entity is a limited liability company.
Q3. Would a profit sharing agreement satisfy the “financial or other beneficial interest” requirement set forth in Insurance Law section 2139(b)?
- A3. Yes. A profit sharing agreement, which is an agreement between a business entity and an employee that allows the employee to share in the entity’s profits, would satisfy the “financial or other beneficial interest” requirement set forth in Insurance Law section 2139(b).
Q4. How can an individual or sublicensee become qualified to act as a title insurance agent if New York is the applicant"s declared home state?
- A4. The applicant has two possible options:
- an applicant must complete a New York-approved prelicensing course for title insurance agents and pass the New York title insurance agent examination. The person must complete the prelicensing course prior to sitting for the examination; OR
- an applicant that is currently licensed as an attorney-at-law in New York and is in good standing with the New York State Office of Court Administration need not complete a prelicensing course or pass a title insurance agent examination. The applicant must submit a certificate of good standing from the Appellate Division of the Supreme Court for the Division where the attorney was admitted.
Q5. How can an individual or sublicensee become qualified to act as a title insurance agent if New York is NOT the applicant"s declared home state (i.e., applicant is a non-resident)?
- A5. If an applicant is a resident of a state other than New York, then the applicant must be currently licensed and in compliance in the applicant"s declared home state. NOTE: The applicant"s license information MUST be included in the National Producer Database; if not, then the applicant must submit a currently dated certification from the applicant"s declared home state.
Q6. Are there words that may not be used in a title insurance agent entity"s name?
- A6. Pursuant to Limited Liability Corporation Law section 204(f) and Business Corporation Law section 301(a)(5)(b), the use of certain words in a business entity"s name is restricted. These names are NOT necessarily prohibited; however, an additional approval is required from this Department if the business entity"s name includes one of the words listed at this link http://www.dos.ny.gov/corps/restricted_words.html. A business entity may have obtained this approval when it was formed. If so, attach a copy of the written approval with the application.
Q7. Must an employee of an UNDERWRITER obtain a title insurance agent license?
- A7. Yes, an employee of an underwriter (title insurance corporation) that receives commission or other compensation for services that is directly dependent upon the amount of title insurance business done and who performs the functions set forth in Insurance Law section 2101(y)(1) must obtain a title insurance agent license.
Q8. May an entity be a sublicensee of a business entity?
- A8. No, only a natural person may be a sublicensee of a business entity.
Q9. May a sublicensee also have an individual license?
- A9. Yes, a sublicensee may also hold an individual license. Note that while a sublicensee MAY have an individual license, he/she does not have to. However, if an individual does not have an individual license, then the individual may act only on behalf of the business entity that has included him or her as a sublicensee.
Q10. Does each individual sublicensee need to apply for a title insurance agent license?
- A10. No, the sublicensee does not need to hold an individual license unless the sublicensee is doing business in his or her individual name as well as in the business entity"s name. Each sublicensee must satisfy the statutory qualifications for licensing and satisfy any continuing education requirements.
Q11. Does an examining counsel need to apply for a title insurance agent license?
- A11. Yes, an examining counsel must be licensed as a title insurance agent if the counsel engages in the activities that require licensing as set forth in Insurance Law section 2101(y).
Q12. Must an applicant answer all the questions listed on the application?
- A12. Yes, an applicant must answer all the questions listed on the application. Applicants also must submit all required and supporting documentation with the application. The Department will return to the applicant an application that is not fully completed and is missing information.
Q13. What is a company appointment and is it required?
- A13. Pursuant to the Insurance Law, in order for a title insurance agent to do business, a title insurance corporation must file a company appointment on a title insurance agent"s behalf within 15 days from the date an agency contract is executed or the first application for an insurance contract or policy is submitted to the insurer.
A title insurance agent who is licensed with no company appointments is considered to be "inactive." The agent may not transact business until a licensed title insurance corporation has filed an appointment on behalf of the title agent and then may transact business only on behalf of that corporation.
A sublicensee of a business entity need not be separately appointed by the title insurance corporation. The appointment of the business entity covers all sublicensees. However, the appointment of the business entity does not cover employees who are not sublicensees and, as such, are operating pursuant to their individual licenses.
Every New York-authorized title insurance corporation has been notified about the appointment process. Please contact the appropriate title insurance corporation if you are seeking to be appointed.
Q14. May a person or business entity that is not licensed as a title insurance agent receive commission or otherwise be compensated based upon business generated for acting as a title insurance agent?
- A14. No, a person or business entity may not receive commission or otherwise be compensated based upon business generated for acting as a title insurance agent as defined in Section 2101(y) of the Insurance Law unless licensed as a title insurance agent.