NY State Senate Bill 2009-S338

Archive: Last Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
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Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to insurance
Jan 07, 2009	referred to insurance

2009-S338 (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§2101, 2103, 2115 & 2120, Ins L
Versions Introduced in 2011-2012 Legislative Session:: S2668

2009-S338 (ACTIVE) - Summary

Provides for the licensure of authorized title insurance company agents and empowers the insurance department to administer all requirements relating thereto; requires the superintendent of insurance to develop an examination to test qualifications of an individual title insurance agent; exempts certain attorneys and title insurance agents; requires an initial and renewal fee of two hundred dollars for a two year license

2009-S338 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S338

 TITLE OF BILL :
An act to amend the insurance law, in relation to the licensing of
agents of authorized title insurance companies


 PURPOSE/SUMMARY OF PROVISIONS :
This bill amends Section 2101 of the Insurance Law in defining
insurance agent and title insurance agent.  This bill amends Section
2103 of the Insurance Law in the following three ways: 1) By requiring
the Superintendent of Insurance to develop an examination adapted to
test the qualifications of an individual title insurance agent in
accordance with subparagraph (b) of paragraph (2) of subsection (f) of
Section 2103 of the Insurance Law. 2) By providing exemptions from the
examination to New York State licensed attorneys and title insurance
agents who on or before June I, 1994 had acted as an agent of an
authorized title insurance company for a period of 30 months. 3) By
requiring an initial and renewal fee of two hundred dollars for a two
year license. This bill amends Section 2115 of the Insurance Law in
relation to the payment of commissions to agents of title insurance
companies. Lastly, this bill amends section 2120 of the Insurance Law
in relation to treatment of all funds collected as fiduciary funds.

 JUSTIFICATION :
New York State is one of only a few states that does not require title

insurance agents to be licensed. In a hearing held by the New York
State Department of Insurance on February 13, 1991, all those who
testified spoke of the need for licensing of title insurance agents in
this state. Many questions were raised as to the competence of some
title insurance agents. The need to assure competency of title agents
is essential. The bill provides that the Superintendent of Insurance
shall develop an examination to test the qualification of those
wishing to act as a title insurance agent.  Upon successful passage of
this examination, the agent would be issued a two-year license as a
title insurance agent. In today's market, the title insurance agent
has the capability of moving from one title insurance company to
another with the business such agent controls. Title insurers have
experienced increases in the number and severity of agent defalcations
in recent years. If the Insurance Department were given the authority
to discipline and remove the license of any agent who violates the
Insurance Law or proves otherwise untrustworthy, the incidence of
fraud would be reduced.  There is a widely felt need in the industry
for licensing of title insurance agents who in many cases do all of
the work involved in effecting a title insurance policy, such as title
searches, clearing titles and filing of documents for the title
companies in the issuance of a title policy. Licensing would elevate
the professionalism and knowledge of title agents. Inevitably it is
the consumer who pays the price for this fraudulent practice and this
legislation will aid in alleviating that hardship.

 FISCAL IMPLICATIONS :
The New York State Insurance Department shall administer the licensing
procedures and charge a two hundred dollar fee for a two-year
renewable license. There are approximately 600 title agents operating
in the state. This would generate about $120,000 in income for the
state, every two years.

 EFFECTIVE DATE :
This act shall take effect immediately.

2009-S338 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   338

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 7, 2009
                               ___________

Introduced  by  Sen.  KRUGER -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance

AN ACT to amend the insurance law,  in  relation  to  the  licensing  of
  agents of authorized title insurance companies

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph 4 of subsection (a) of section 2101 of the insur-
ance law, as amended by chapter 687 of the laws of 2003, is  amended  to
read as follows:
  (4)  any [agent or other representative of any] EMPLOYEE OF AN AUTHOR-
IZED title insurance company  OR  LICENSED  TITLE  INSURANCE  AGENT  WHO
DEVOTES  SUBSTANTIALLY  ALL  OF HIS SERVICE TO THE SOLICITATION OF TITLE
INSURANCE BUSINESS FROM THE INSURING PUBLIC AND  WHO  RECEIVES  FOR  THE
SOLICITATION  OF SUCH TITLE INSURANCE COMPENSATION IN THE FORM OF SALARY
OR COMMISSION;
  S 2. Section 2101 of the insurance law is  amended  by  adding  a  new
subsection (v) to read as follows:
  (V) IN THIS ARTICLE, AN "AGENT OF AN AUTHORIZED TITLE INSURANCE COMPA-
NY"  MEANS  ANY  PERSON, FIRM OR CORPORATION AUTHORIZED IN WRITING BY AN
AUTHORIZED TITLE INSURANCE COMPANY TO PERFORM AND WHO ACTUALLY  PERFORMS
THE FOLLOWING SERVICES:
  (1)  ISSUE  COMMITMENTS  TO  INSURE  OR  REPORTS OF TITLE BASED UPON A
SEARCH OR EXAMINATION OF TITLE.
  (2) DETERMINE INSURABILITY IN ACCORDANCE WITH UNDERWRITING  RULES  AND
STANDARDS  PRESCRIBED  BY THE TITLE INSURANCE COMPANY; AND, IN ADDITION,
PERFORMS, IN SUBSTANTIAL PART, THE FOLLOWING:
  (A) COLLECTS PREMIUMS;
  (B) CLOSES OR SETTLES TITLE; AND
  (C) RECORDS CLOSING DOCUMENTS.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03598-01-9

S. 338                              2

  S 3. Paragraphs 10 and 11 of subsection (g) of  section  2103  of  the
insurance  law,  paragraph  10  as  amended and paragraph 11 as added by
chapter 687 of the laws of 2003, are amended to read as follows:
  (10) in the discretion of the superintendent, as to all or any part of
the  written  examination or the prerequisite minimum ninety hour course
specified in subparagraph (B) of paragraph two of subsection (f) of this
section, of any individual seeking to be named a licensee  or  sublicen-
see, upon whom has been conferred the Chartered Property Casualty Under-
writer (C.P.C.U.) designation by the American Institute for Property and
Liability Underwriters; [or]
  (11)  of  any individual who applies for an insurance agent license in
this state who was previously licensed for the same  line  or  lines  of
authority in another state, provided, however, that the applicant's home
state  grants  non-resident  licenses  to residents of this state on the
same basis. Such individual shall also not be required to  complete  any
prelicensing  education.  This exemption is only available if the person
is currently licensed in that state or if the  application  is  received
within ninety days of the date of cancellation of the applicant's previ-
ous  license  and if the prior state issues a certification that, at the
time of cancellation, the applicant was in good standing in  that  state
or  the  state's  producer  database records, maintained by the National
Association of Insurance Commissioners, its affiliates or  subsidiaries,
indicate  that  the producer is or was licensed in good standing for the
line of authority requested. An individual or entity licensed in another
state who moves to this state shall make an  application  within  ninety
days  of  establishing legal residence to become a resident licensee. No
prelicensing education or examination shall be required of  that  person
to  obtain  any  line  of  authority  previously held in the prior state
except where the superintendent determines otherwise  by  regulation[.];
OR
  S 4. Subsection (g) of section 2103 of the insurance law is amended by
adding two new paragraphs 12 and 13 to read as follows:
  (12)  OF  ANY  APPLICANT SEEKING TO OBTAIN A LICENSE AS AN AGENT OF AN
AUTHORIZED TITLE INSURANCE COMPANY, WHEN SUCH APPLICANT  IS  A  LICENSED
ATTORNEY AT LAW OF THIS STATE; OR
  (13) IN THE DISCRETION OF THE SUPERINTENDENT, AS TO ALL OR ANY PART OF
THE  WRITTEN  EXAMINATION OR THE PREREQUISITE MINIMUM NINETY-HOUR COURSE
SPECIFIED IN SUBPARAGRAPH (B) OF PARAGRAPH TWO OF SUBSECTION (F) OF THIS
SECTION, OF ANY PERSON, FIRM OR CORPORATION SEEKING TO BE LICENSED AS AN
AGENT OF AN AUTHORIZED TITLE INSURANCE COMPANY IF THE SUPERINTENDENT  IS
SATISFIED THAT THE APPLICANT POSSESSES THE REQUISITE KNOWLEDGE AND EXPE-
RIENCE WITH RESPECT TO THE SUBJECT MATTER OF THE PART OF THE EXAMINATION
BEING WAIVED.
  S 5. Subsection (j) of section 2103 of the insurance law is amended by
adding a new paragraph 14 to read as follows:
  (14) NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS SECTION, THERE SHALL
BE  PAID  TO THE SUPERINTENDENT FOR A TITLE INSURANCE AGENT'S LICENSE AN
INITIAL FEE OF TWO HUNDRED DOLLARS AND A  RENEWAL  FEE  OF  TWO  HUNDRED
DOLLARS.  THE  TERM  FOR  SUCH LICENSE SHALL BE A MAXIMUM OF TWENTY-FOUR
MONTHS. ALL SUCH LICENSES SHALL EXPIRE ON JUNE THIRTIETH  OF  EACH  EVEN
NUMBERED  YEAR,  AND  THE SUPERINTENDENT SHALL HAVE AUTHORITY TO PRORATE
THE LICENSING FEE.
  S 6. Subsection (n) of section 2103 of the insurance law,  as  amended
by chapter 687 of the laws of 2003, is amended to read as follows:
  (n)  Any  insurance  agent licensed pursuant to subsection (b) of this
section, EXCEPT AN AGENT OF AN AUTHORIZED TITLE  INSURANCE  COMPANY,  is

S. 338                              3

hereby authorized while so licensed, to act in the sale, solicitation or
negotiation  for  an  insurance contract providing solely for disability
benefits written to meet minimum requirements of  article  nine  of  the
workers' compensation law.
  S  7.  Section  2103  of  the insurance law is amended by adding a new
subsection (p) to read as follows:
  (P) NOTWITHSTANDING ANY OTHER PROVISION OF THIS  SECTION,  THE  SUPER-
INTENDENT  SHALL  ISSUE  A  LICENSE  TO ANY PERSON, FIRM OR CORPORATION,
AUTHORIZING SUCH LICENSEE TO ACT AS AN  AGENT  OF  AN  AUTHORIZED  TITLE
INSURANCE COMPANY, WHEN SUCH PERSON, FIRM OR CORPORATION:
  (1)  FILES  IN  THE  OFFICE  OF  THE SUPERINTENDENT, ON OR BEFORE JUNE
FIRST, TWO THOUSAND NINE, OR WITHIN NINETY DAYS AFTER THE SUPERINTENDENT
HAS PROMULGATED APPLICATION FORMS, WHICHEVER DATE IS LATER  AN  APPLICA-
TION  FOR  SUCH LICENSE, IN SUCH FORM AND CONTAINING SUCH INFORMATION AS
THE SUPERINTENDENT PRESCRIBES;
  (2) PAYS TO THE SUPERINTENDENT  AN  APPLICATION  FEE  OF  TWO  HUNDRED
DOLLARS;
  (3)  DEMONSTRATES  TO THE SATISFACTION OF THE SUPERINTENDENT THAT SUCH
APPLICANT HAS REGULARLY AND CONTINUOUSLY ACTED AS AN AGENT OF AN AUTHOR-
IZED TITLE INSURANCE COMPANY FOR A PERIOD OF AT LEAST THREE YEARS  IMME-
DIATELY  PRECEDING  THE  FILING OF SUCH APPLICATION AND IS COMPETENT AND
TRUSTWORTHY TO ACT AS A TITLE INSURANCE AGENT; AND
  (4) IS EIGHTEEN YEARS OF AGE OR OVER AT THE TIME OF  THE  ISSUANCE  OF
SUCH  LICENSE. SUCH LICENSE SHALL BE FOR A TERM EXPIRING ON JUNE THIRTI-
ETH, TWO THOUSAND ELEVEN, AND RENEWALS THEREOF SHALL BE ISSUED  PURSUANT
TO PARAGRAPH TWO OF SUBSECTION (J) OF THIS SECTION.
  S  8.  Paragraph  1 of subsection (a) of section 2115 of the insurance
law, as amended by chapter 418 of the laws of 2000, is amended  to  read
as follows:
  (1)  No  insurer  doing  business in this state, and no agent or other
representative thereof, except as provided in subsection (b) [hereof] OF
THIS SECTION, shall pay any commission  or  other  compensation  to  any
person,  firm,  association or corporation for acting as insurance agent
in this state, except to a licensed insurance agent of such  insurer  or
to  a  person  described in paragraph two [or four] of subsection (a) of
section two thousand one hundred  one  of  this  article  or  except  as
provided  in  subsection  (c)  of this section. For the purposes of this
section, "acting as insurance agent" shall not include the referral of a
person to a licensed insurance agent or broker that does not  include  a
discussion  of  specific insurance policy terms and conditions and where
the compensation for referral is not based upon the purchase  of  insur-
ance by such person.
  S  9.  The section heading and subsections (a) and (b) of section 2115
of the insurance law, paragraph 1 of subsection (a) as amended by  chap-
ter 805 of the laws of 1984 and subsection (b) as amended by chapter 540
of the laws of 1996, are amended to read as follows:
  Property/casualty  insurance  agents; AGENTS OF TITLE INSURANCE COMPA-
NIES; commissions.  (a) (1) No insurer doing business in this state, and
no  agent  or  other  representative  thereof,  except  as  provided  in
subsection  (b)  [hereof]  OF  THIS SECTION, shall pay any commission or
other compensation to any person, firm, association or  corporation  for
acting  as insurance agent in this state, except to a licensed insurance
agent of such insurer or to a person  described  in  paragraph  two  [or
four]  of subsection (a) of section two thousand one hundred one of this
article or except as provided in subsection (c) of this section.

S. 338                              4

  (2) The term "licensed insurance agent" as  used  in  this  subsection
includes  any agent authorized to act as such by a license issued and in
force pursuant to the provisions of subsection (b) of section two  thou-
sand  one  hundred three of this article or authorized to act as such in
connection  with  contracts  for  disability  benefits  pursuant  to the
provisions of subsection (n) of such section.
  (b) This section shall  not  apply  to  any  life  insurance  company,
fraternal benefit society, accident and health insurance company, health
maintenance  organization[, title insurance company] nor to any agent or
representative of any such insurer, society or health maintenance organ-
ization, acting as such.
  S 10. Section 2120 of the insurance law is amended  by  adding  a  new
subsection (e) to read as follows:
  (E)  AGENTS  OF  TITLE INSURANCE COMPANIES SHALL TREAT ALL FUNDS TAKEN
FOR THE ACCOUNT OF OTHERS, INCLUDING  PREMIUMS  COLLECTED  BY  THEM,  IN
CONNECTION WITH ANY TITLE INSURANCE TRANSACTION AS FIDUCIARY FUNDS.
  S  11.  Within  120  days immediately after the effective date of this
act, the superintendent of insurance shall promulgate application  forms
for  persons,  firms  and corporations seeking to obtain a license as an
agent of an authorized title insurance company.
  S 12. Each person, firm or corporation who has  filed  an  application
for a license as an agent of an authorized title insurance company on or
before  90  days  immediately  after the superintendent of insurance has
promulgated application forms for such a  license  pursuant  to  section
eleven  of  this  act, may act as such an agent without a license issued
pursuant to section 2103 of the insurance law until  the  superintendent
of  insurance  has  finally  determined the application for such license
filed by such person, firm or corporation.
  S 13. This act shall take effect immediately, provided, however,  that
sections  2103  and  2115  of  the insurance law, as amended by sections
three, four, eight and nine of this act,  shall  not  be  applicable  to
agents  of  authorized  title  insurance companies until the one hundred
eightieth day after this act shall have become a law  or  the  ninetieth
day  after  the  superintendent of insurance has promulgated application
forms pursuant to section eleven of this act, whichever date  is  later,
and  provided  further, however, that the amendments made to paragraph 1
of subsection (a) of section 2115 of the insurance law by section  eight
of  this  act  shall be deemed repealed on the same date as section 5 of
chapter 418 of the laws of 2000, as amended, when  upon  such  date  the
provisions of section nine of this act shall take effect.

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Senate Bill S338

Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

2009-S338 (ACTIVE) - Details

2009-S338 (ACTIVE) - Summary

2009-S338 (ACTIVE) - Sponsor Memo

2009-S338 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S338

Share this bill

Sponsored By

Carl Kruger

Archive: Last Bill Status - In Senate Committee Insurance Committee

2009-S338 (ACTIVE) - Details

2009-S338 (ACTIVE) - Summary

2009-S338 (ACTIVE) - Sponsor Memo

2009-S338 (ACTIVE) - Bill Text download pdf

Comments