§ 2113 — Title insurance agent commissions; disclosure

New York § 2113

• Jurisdiction: New York
• Law ISC: Insurance
• Art. 21: Agents, Brokers, Adjusters, Consultants and Intermediaries

Text

§ 2113. Title insurance agent commissions; disclosure. (a) No insurer\ndoing business in this state, and no agent or other representative\nthereof, shall pay any commission or other compensation to any person,\nfirm, association or corporation for acting as a title insurance agent\nin this state, except to a licensed title insurance agent.\n (b) At the time of the application, a title insurance agent shall\nprovide to every applicant for insurance, a written good faith estimate\nof the premium on the policy or policies to be issued and a breakdown of\nthe amount of all fees and service costs, including all filing fees,\nrecording charges, and closing costs, and any other ancillary or\ndiscretionary charges to be incurred, and the amount of any commission\nor other compensation to be paid to such agent by the title insurance\ncorporation. If no title insurance agent is utilized, the title insurer\nshall provide the disclosures. If the applicant is represented by an\nattorney, the written good faith estimate shall be provided to the\nattorney.\n (c) Nothing in this chapter shall be deemed to or be construed in a\nmanner to authorize or permit any activity or practice, with respect to\nthe business of title insurance, that is prohibited by section four\nhundred eighty-four or four hundred ninety-five of the judiciary law, or\notherwise prohibited by law, including the unauthorized practice of law.\n (d) Except as provided in subsection (f) of this section, no person or\nentity who acts as an agent, representative, attorney, or employee of\nthe owner, lessee, or mortgagee, or of the prospective owner, lessee, or\nmortgagee of the real property or any interest therein and who or whose\nspouse also is a member, employee, or director of a title insurance\nagent, owns any interest in a title insurance agent, or is a subsidiary\nor affiliate of any title insurance agent, shall refer an applicant for\ninsurance to such agent, and no such title insurance agent shall accept\nany such referral of title insurance business, unless the referral is\nmade in accordance with section six thousand four hundred nine of this\nchapter and such person or entity, at the time of making a referral,\nprovides, at a minimum, the following written disclosure to the\napplicant:\n (1) the nature of the relationship between the person or entity and\nthe title insurance agent;\n (2) that the applicant is not required to use the services of the\ntitle insurance agent or the title insurance corporation to which the\napplicant is being referred;\n (3) that any money or other thing of value directly or indirectly paid\nby the title insurance agent or title insurance corporation to the\nperson or entity is based on the person or entity's financial interest\nin the title insurance agent, and is not related to the amount of title\ninsurance business the person or entity refers to the title insurance\nagent;\n (4) that the person or entity is not required to refer a specified\namount of title insurance business to the title insurance agency;\n (5) the amount or value of any compensation or other thing of value\nthat the person or entity expects to receive in connection with the\nservices to be provided by the title insurance agent or the title\ninsurance corporation to which the party is being referred; and\n (6) any relevant disclosures required by the federal real estate\nsettlement procedures act of 1974, as amended.\n (e) For the purposes of this chapter, an attorney or his or her law\nfirm may represent a client in a matter and may also act as a title\ninsurance agent in such matter subject to applicable law.\n (f) Where a licensed attorney represents an applicant in a real estate\ntransaction and the applicant also retains the attorney as the title\ninsurance agent, the attorney shall not be required to make the written\ndisclosure required by subsection (d) of this section provided the\nattorney advises the client that the client is not required to use the\nattorney as the title insurance agent.\n (g) As used in this section, "applicant" means the person, firm,\nlimited liability company or corporation for whom the purchase of the\nproperty that is the subject of the title insurance policy is financed\nor to whom a mortgage loan is made or who owns the property, or to a\nperson who is an attorney-in-fact for such person.\n (h) The superintendent shall promulgate regulations to enforce the\ndisclosure requirements of subdivision (d) of this section and in doing\nso shall consider the relevant standards of the federal real estate\nsettlement procedures act of 1974, as amended.\n