N.Y. Insurance Law § 2113: Title insurance agent commissions; disclosure

§ 2113. Title insurance agent commissions; disclosure. (a) No insurer

doing business in this state, and no agent or other representative

thereof, shall pay any commission or other compensation to any person,

firm, association or corporation for acting as a title insurance agent

in this state, except to a licensed title insurance agent.

(b) At the time of the application, a title insurance agent shall

provide to every applicant for insurance, a written good faith estimate

of the premium on the policy or policies to be issued and a breakdown of

the amount of all fees and service costs, including all filing fees,

recording charges, and closing costs, and any other ancillary or

discretionary charges to be incurred, and the amount of any commission

or other compensation to be paid to such agent by the title insurance

corporation. If no title insurance agent is utilized, the title insurer

shall provide the disclosures. If the applicant is represented by an

attorney, the written good faith estimate shall be provided to the

attorney.

(c) Nothing in this chapter shall be deemed to or be construed in a

manner to authorize or permit any activity or practice, with respect to

the business of title insurance, that is prohibited by section four

hundred eighty-four or four hundred ninety-five of the judiciary law, or

otherwise prohibited by law, including the unauthorized practice of law.

(d) Except as provided in subsection (f) of this section, no person or

entity who acts as an agent, representative, attorney, or employee of

the owner, lessee, or mortgagee, or of the prospective owner, lessee, or

mortgagee of the real property or any interest therein and who or whose

spouse also is a member, employee, or director of a title insurance

agent, owns any interest in a title insurance agent, or is a subsidiary

or affiliate of any title insurance agent, shall refer an applicant for

insurance to such agent, and no such title insurance agent shall accept

any such referral of title insurance business, unless the referral is

made in accordance with section six thousand four hundred nine of this

chapter and such person or entity, at the time of making a referral,

provides, at a minimum, the following written disclosure to the

applicant:

(1) the nature of the relationship between the person or entity and

the title insurance agent;

(2) that the applicant is not required to use the services of the

title insurance agent or the title insurance corporation to which the

applicant is being referred;

(3) that any money or other thing of value directly or indirectly paid

by the title insurance agent or title insurance corporation to the

person or entity is based on the person or entity's financial interest

in the title insurance agent, and is not related to the amount of title

insurance business the person or entity refers to the title insurance

agent;

(4) that the person or entity is not required to refer a specified

amount of title insurance business to the title insurance agency;

(5) the amount or value of any compensation or other thing of value

that the person or entity expects to receive in connection with the

services to be provided by the title insurance agent or the title

insurance corporation to which the party is being referred; and

(6) any relevant disclosures required by the federal real estate

settlement procedures act of 1974, as amended.

(e) For the purposes of this chapter, an attorney or his or her law

firm may represent a client in a matter and may also act as a title

insurance agent in such matter subject to applicable law.

(f) Where a licensed attorney represents an applicant in a real estate

transaction and the applicant also retains the attorney as the title

insurance agent, the attorney shall not be required to make the written

disclosure required by subsection (d) of this section provided the

attorney advises the client that the client is not required to use the

attorney as the title insurance agent.

(g) As used in this section, "applicant" means the person, firm,

limited liability company or corporation for whom the purchase of the

property that is the subject of the title insurance policy is financed

or to whom a mortgage loan is made or who owns the property, or to a

person who is an attorney-in-fact for such person.

(h) The superintendent shall promulgate regulations to enforce the

disclosure requirements of subdivision (d) of this section and in doing

so shall consider the relevant standards of the federal real estate

settlement procedures act of 1974, as amended.