NY State Senate Bill 2019-S2929A

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
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to insurance
May 29, 2019	reported and committed to finance
Apr 29, 2019	print number 2929a
Apr 29, 2019	amend and recommit to insurance
Jan 30, 2019	referred to insurance

Votes

- May 29, 2019 - Insurance Committee Vote
  S2929A
  
  11
  
  Aye
  
  0
  
  Nay
  
  0
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Insurance Committee Vote: May 29, 2019
      
      aye (11)
      
      Breslin
      
      Brooks
      
      Carlucci
      
      Kennedy
      
      Martinez
      
      Ortt
      
      Parker
      
      Ranzenhofer
      
      Sanders Jr.
      
      Serino
      
      Seward

Bill Amendments

Original

A (Active)

2019-S2929 - Details

See Assembly Version of this Bill:: A2223
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §6409, Ins L
Versions Introduced in Other Legislative Sessions:: 2021-2022: A374
2023-2024: A7152

2019-S2929 - Summary

Permits any title insurance corporation or title insurance agent, or any other person acting for or on behalf of the title insurance corporation or title insurance agent, from undertaking any usual and customary marketing activity aimed at acquainting present and prospective customers with the advantages of using a particular title insurer or title insurance agent that are not intended for the purpose of a reward for the future placement of, or the past placement, of a particular piece of title insurance business; lays out such permitted practices.

2019-S2929 - Sponsor Memo

                                
 
BILL NUMBER: S2929

SPONSOR: BRESLIN
 
TITLE OF BILL:

An act to amend the insurance law, in relation to allowable expenses for
title insurance corporations and title insurance agents

 
PURPOSE:

This bill clarifies that an enumerated list of usual and customary
marketing activity aimed at acquainting present and prospective custom-
ers with the advantages of using a particular title insurance corpo-
ration or title insurance agent does not constitute an "inducement" or
"compensation" under the Section 6409(d) of the Insurance Law provided
it is not intended for the purpose of a reward for the future placement
of, or the past placement, of a particular piece of title insurance
business.

 
SUMMARY OF PROVISIONS:

Section 1: This section adds a new subdivision to section 6409(d) of the
Insurance Law, clarifying that an enumerated list of usual and customary
marketing activity shall not be considered an "inducement" or "compen-
sation" under this Section, unless it is given with the intention to
directly or indirectly compensate a present or perspective client for
any past or present placement of title insurance business. In addition,
it amends section 6409(e) of the Insurance Law to give the Superinten-
dent of the Department of Financial Services the discretion to exclude
certain marketing expenses from the calculation of the title insurance
rates.

Section 2: Provides that this bill shall take effect immediately.

 
JUSTIFICATION:

In 2017, as part of proposed rulemaking to clarify and enforce Insurance
Law Section 6409(d), the Department of Financial Services drafted regu-
lations that deemed any marketing practices that conveyed a benefit onto
a past or prospective client an illegal inducement or compensation
"regardless of whether provided as a quid pro quo for specific busi-
ness." This interpretation goes beyond the intended scope of the law,
and seems to be an about face from previous guidance by the Office of
General Counsel (OGC), which were requested by and relied upon by the
title insurance industry, and which expressly required the presence of a
"quid pro quo" in order to constitute an illegal inducement or compen-
sation. See i.e. OGC Opinion No. 11-06-05 (June 21, 2011).  Because the
title insurance industry does not engage in direct to consumer advertis-
ing, insurers and agents need to be able to market themselves and their
services to their clients and their representatives, including attorneys
and other real estate professionals, and they should be able to do this
in a way similar to others in the insurance industry and general econo-
my, as long as there is no direct or indirect "quid pro quo" for the
placement of a particular piece title insurance business. This bill
clarifies that the common marketing activity of title insurers and
agents does not constitute an "inducement" or "compensation" absent a
quid pro quo, and enumerates examples of such permitted customary
marketing activity.  This bill also allows the Superintendent of the
Department of Financial Services to determine if certain categories of
marketing expenses should be excluded from the calculation of the title
insurance rates.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None to the state.

 
EFFECTIVE DATE:
Immediately.

2019-S2929 - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2929
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             January 30, 2019
                                ___________
 
 Introduced  by  Sen. BRESLIN -- 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 allowable expenses for
   title insurance corporations and title insurance agents
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subsection  (d)  of section 6409 of the insurance law, as
 amended by section 17 of part V of chapter 57 of the laws  of  2014,  is
 amended to read as follows:
   (d)  (1) No title insurance corporation, title insurance agent, or any
 other person acting for or on behalf of the title insurance  corporation
 or  title  insurance agent, shall offer or make, directly or indirectly,
 any rebate of any portion of the fee, premium or charge made, or pay  or
 give  to any applicant, or to any person, firm, or corporation acting as
 agent, representative, attorney, or employee of the owner, lessee, mort-
 gagee or the prospective owner, lessee, or mortgagee of the real proper-
 ty or any interest therein, either directly or indirectly,  any  commis-
 sion,  any  part  of  its fees or charges, or any other consideration or
 valuable thing, as an inducement for, or as compensation for, any  title
 insurance  business,  nor  shall  any applicant, or any person, firm, or
 corporation acting as agent, representative, attorney,  or  employee  of
 the  owner,  lessee,  mortgagee  or of the prospective owner, lessee, or
 mortgagee of the real property or anyone having  any  interest  in  real
 property  knowingly  receive, directly or indirectly, any such rebate or
 other consideration or valuable thing. Any person or entity who violates
 this section shall be subject to a penalty of [(1)]  (I)  five  thousand
 dollars; or [(2)] (II) up to ten times the amount of any compensation or
 rebate  received or paid in the case of a title insurance corporation or
 title insurance agent; or [(3)] (III) up to five times the amount of any
 compensation or rebate received or paid; or [(4)] (IV) in the case of an
 applicant for title insurance that covers real  property  used  predomi-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD06686-01-9

 S. 2929                             2
 
 nantly  for  residential  purposes,  and which consists of not more than
 four dwelling units, other than hotels and  motels,  an  amount  not  to
 exceed  the compensation or rebate received or paid, when such applicant
 knew  that it was a violation to receive such rebate, or other consider-
 ation or valuable thing; provided, however, if such  applicant  did  not
 know  that it was a violation to receive such rebate, or other consider-
 ation or valuable thing, he or she shall not be assessed a penalty under
 this [subdivision] SUBSECTION.
   (2) NOTHING CONTAINED IN PARAGRAPH  ONE  OF  THIS  SUBSECTION  TO  THE
 CONTRARY  SHALL PROHIBIT ANY TITLE INSURANCE CORPORATION OR TITLE INSUR-
 ANCE AGENT, OR ANY OTHER PERSON ACTING FOR OR ON  BEHALF  OF  THE  TITLE
 INSURANCE  CORPORATION  OR  TITLE  INSURANCE AGENT, FROM UNDERTAKING ANY
 USUAL AND CUSTOMARY MARKETING ACTIVITY AIMED AT ACQUAINTING PRESENT  AND
 PROSPECTIVE  CUSTOMERS  WITH  THE ADVANTAGES OF USING A PARTICULAR TITLE
 INSURER OR TITLE INSURANCE AGENT THAT ARE NOT INTENDED FOR  THE  PURPOSE
 OF  A  REWARD  FOR  THE FUTURE PLACEMENT OF, OR THE PAST PLACEMENT, OF A
 PARTICULAR PIECE OF TITLE INSURANCE BUSINESS,  INCLUDING  THE  FOLLOWING
 EXPRESSLY PERMITTED ACTIVITIES:
   (I)  ADVERTISING  OR  MARKETING IN ANY PUBLICATION, EVENT OR MEDIA, AT
 MARKET RATES, INCLUDING  SPONSORSHIPS,  ADVERTISING  GIFTS,  PROMOTIONAL
 ITEMS AND CONSUMABLES;
   (II) MEALS AND BEVERAGES IN CONNECTION WITH THE ENTERTAINMENT OF PRES-
 ENT  OR  PROSPECTIVE  CUSTOMERS WHERE ONE OR MORE EMPLOYEES OR REPRESEN-
 TATIVES OF THE TITLE INSURANCE CORPORATION OR TITLE INSURANCE AGENT  ARE
 PRESENT AND TITLE INSURANCE BUSINESS IS DISCUSSED;
   (III)  ENTERTAINMENT  OF  PRESENT  OR PROSPECTIVE CUSTOMERS, INCLUDING
 TICKETS TO OR PARTICIPATION IN SPORTING EVENTS, CULTURAL OR OTHER CHARI-
 TY EVENTS, CONCERTS, SHOWS OR ARTISTIC PERFORMANCES WHERE  ONE  OR  MORE
 EMPLOYEES OR REPRESENTATIVES OF THE TITLE INSURANCE CORPORATION OR TITLE
 INSURANCE AGENT ARE PRESENT AND TITLE INSURANCE BUSINESS IS DISCUSSED;
   (IV) CONTINUING LEGAL EDUCATION COURSE MATERIALS OR INSTRUCTION; AND
   (V) CHARITABLE CONTRIBUTIONS IN THE NAME OF THE TITLE INSURANCE CORPO-
 RATION OR TITLE INSURANCE AGENT.
   §  2.  Subsection (e) of section 6409 of the insurance law, as amended
 by section 17 of part V of chapter 57 of the laws of 2014, is amended to
 read as follows:
   (e) Premium rates for  coverage  shall  fully  reflect  the  foregoing
 prohibitions  of  subsection (d) of this section. THE SUPERINTENDENT MAY
 PROVIDE THAT CERTAIN MARKETING EXPENSES, INCLUDING  THOSE  PERMITTED  IN
 PARAGRAPH TWO OF SUBSECTION (D) OF THIS SECTION, SHOULD BE EXCLUDED BY A
 TITLE  INSURANCE  CORPORATION  AS  AN  ALLOWABLE  EXPENSE AS PART OF THE
 CALCULATION OF TITLE INSURANCE RATES PURSUANT TO ARTICLE TWENTY-THREE OF
 THIS CHAPTER.
   § 3. This act shall take effect immediately.

co-Sponsors

View additional co-sponsors

2019-S2929A (ACTIVE) - Details

See Assembly Version of this Bill:: A2223
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §6409, Ins L
Versions Introduced in Other Legislative Sessions:: 2021-2022: A374
2023-2024: A7152

2019-S2929A (ACTIVE) - Summary

2019-S2929A (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S2929A

SPONSOR: BRESLIN
 
TITLE OF BILL:  An act to amend the insurance law, in relation to
allowable expenses for title insurance corporations and title insurance
agents

 
PURPOSE:

This bill clarifies that an enumerated list of usual and customary
marketing activity aimed at acquainting present and prospective custom-
ers with the advantages of using a particular title insurance corpo-
ration or title insurance agent does not constitute an "inducement" or
"compensation" under the Section 6409(d) of the Insurance Law provided
it is not intended for the purpose of a reward for the future placement
of, or the past placement, of a particular piece of title insurance
business.

 
SUMMARY OF PROVISIONS:

Section 1: This section adds a new subdivision to section 6409(d) of the

Insurance Law, clarifying that an enumerated list of usual and customary
marketing activity shall not be considered an "inducement" or "compen-
sation" under this Section, unless it is given with the intention to
directly or indirectly compensate a present or perspective client for
any past or present placement of title insurance business.

Section 2: Provides that this bill shall take effect immediately.

 
JUSTIFICATION:

In 2017, as part of proposed rulemaking to clarify and enforce Insurance
Law Section 6409(d), the Department of Financial Services drafted regu-
lations that deemed any marketing practices that conveyed a benefit onto
a past or prospective client an illegal inducement or compensation
"regardless of whether provided as a quid pro quo for specific busi-
ness." This interpretation goes beyond the intended scope of the law,
and seems to be an about face from previous guidance by the Office of
General Counsel (OGC), which were requested by and relied upon by the
title insurance industry, and which expressly required the presence of a
"quid pro quo" in order to constitute an illegal inducement or compen-
sation. See i.e. OGC Opinion No. 11-06-05 (June 21, 2011).

Because the title insurance industry does not engage in direct to
consumer advertising, insurers and agents need to be able to market
themselves and their services to their clients and their represen-
tatives, including attorneys and other real estate professionals, and
they should be able to do this in a way similar to others in the insur-
ance industry and general economy, as long as there is no direct or
indirect "quid pro quo" for the placement of a particular piece title
insurance business. This bill clarifies that the common marketing activ-
ity of title insurers and agents does not constitute an "inducement" or
"compensation" absent a quid pro quo, and enumerates examples of such
permitted customary marketing activity.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None to the state.

 
EFFECTIVE DATE:
Immediately.

2019-S2929A (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  2929--A
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             January 30, 2019
                                ___________
 
 Introduced  by  Sen. BRESLIN -- read twice and ordered printed, and when
   printed to be committed to the Committee  on  Insurance  --  committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee
 
 AN ACT to amend the insurance law, in relation to allowable expenses for
   title insurance corporations and title insurance agents
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subsection (d) of section 6409 of  the  insurance  law,  as
 amended  by  section  17 of part V of chapter 57 of the laws of 2014, is
 amended to read as follows:
   (d) (1) No title insurance corporation, title insurance agent, or  any
 other  person acting for or on behalf of the title insurance corporation
 or title insurance agent, shall offer or make, directly  or  indirectly,
 any  rebate of any portion of the fee, premium or charge made, or pay or
 give to any applicant, or to any person, firm, or corporation acting  as
 agent, representative, attorney, or employee of the owner, lessee, mort-
 gagee or the prospective owner, lessee, or mortgagee of the real proper-
 ty  or  any interest therein, either directly or indirectly, any commis-
 sion, any part of its fees or charges, or  any  other  consideration  or
 valuable  thing, as an inducement for, or as compensation for, any title
 insurance business, nor shall any applicant, or  any  person,  firm,  or
 corporation  acting  as  agent, representative, attorney, or employee of
 the owner, lessee, mortgagee or of the  prospective  owner,  lessee,  or
 mortgagee  of  the  real  property or anyone having any interest in real
 property knowingly receive, directly or indirectly, any such  rebate  or
 other consideration or valuable thing. Any person or entity who violates
 this  section  shall  be subject to a penalty of [(1)] (I) five thousand
 dollars; or [(2)] (II) up to ten times the amount of any compensation or
 rebate received or paid in the case of a title insurance corporation  or
 title insurance agent; or [(3)] (III) up to five times the amount of any
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD06686-03-9

 S. 2929--A                          2
 
 compensation or rebate received or paid; or [(4)] (IV) in the case of an
 applicant  for  title  insurance that covers real property used predomi-
 nantly for residential purposes, and which consists  of  not  more  than
 four  dwelling  units,  other  than  hotels and motels, an amount not to
 exceed the compensation or rebate received or paid, when such  applicant
 knew  that it was a violation to receive such rebate, or other consider-
 ation or valuable thing; provided, however, if such  applicant  did  not
 know  that it was a violation to receive such rebate, or other consider-
 ation or valuable thing, he or she shall not be assessed a penalty under
 this [subdivision] SUBSECTION.
   (2) NOTHING CONTAINED IN PARAGRAPH  ONE  OF  THIS  SUBSECTION  TO  THE
 CONTRARY  SHALL PROHIBIT ANY TITLE INSURANCE CORPORATION OR TITLE INSUR-
 ANCE AGENT, OR ANY OTHER PERSON ACTING FOR OR ON  BEHALF  OF  THE  TITLE
 INSURANCE  CORPORATION  OR  TITLE  INSURANCE AGENT, FROM UNDERTAKING ANY
 USUAL AND CUSTOMARY MARKETING ACTIVITY AIMED AT ACQUAINTING PRESENT  AND
 PROSPECTIVE  CUSTOMERS  WITH  THE ADVANTAGES OF USING A PARTICULAR TITLE
 INSURER OR TITLE INSURANCE AGENT THAT ARE NOT INTENDED FOR  THE  PURPOSE
 OF  A  REWARD  FOR  THE FUTURE PLACEMENT OF, OR THE PAST PLACEMENT, OF A
 PARTICULAR PIECE OF TITLE INSURANCE BUSINESS,  INCLUDING  THE  FOLLOWING
 EXPRESSLY PERMITTED ACTIVITIES:
   (I)  ADVERTISING  OR  MARKETING IN ANY PUBLICATION, EVENT OR MEDIA, AT
 MARKET RATES, INCLUDING  SPONSORSHIPS,  ADVERTISING  GIFTS,  PROMOTIONAL
 ITEMS AND CONSUMABLES;
   (II)  MEALS  AND BEVERAGES WITH PRESENT OR PROSPECTIVE CUSTOMERS WHERE
 ONE OR MORE EMPLOYEES OR REPRESENTATIVES OF THE TITLE  INSURANCE  CORPO-
 RATION OR TITLE INSURANCE AGENT ARE PRESENT AND TITLE INSURANCE BUSINESS
 IS DISCUSSED;
   (III) CONTINUING LEGAL EDUCATION COURSE MATERIALS OR INSTRUCTION; AND
   (IV)  CHARITABLE  CONTRIBUTIONS  IN  THE  NAME  OF THE TITLE INSURANCE
 CORPORATION OR TITLE INSURANCE AGENT.
   NOTWITHSTANDING THE PROVISIONS OF THIS PARAGRAPH, NO  TITLE  INSURANCE
 CORPORATION  OR TITLE INSURANCE AGENT, OR ANY OTHER PERSON ACTING FOR OR
 ON BEHALF OF A TITLE INSURANCE  CORPORATION  OR  TITLE  INSURANCE  AGENT
 SHALL  UNDERTAKE  ANY  EXPENSES  FOR PROVIDING VACATIONS, TRIPS, TRAVEL,
 GIFTS, GIFT CARDS, GIFT CERTIFICATES OR OTHER THING OF SPECIFIC MONETARY
 VALUE TO ANY PRESENT AND PROSPECTIVE CUSTOMERS.
   § 2. This act shall take effect immediately.

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Senate Bill S2929A

Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

May 29, 2019 - Insurance Committee Vote

Insurance Committee Vote: May 29, 2019

Bill Amendments

2019-S2929 - Details

2019-S2929 - Summary

2019-S2929 - Sponsor Memo

2019-S2929 - Bill Text download pdf

co-Sponsors

2019-S2929A (ACTIVE) - Details

2019-S2929A (ACTIVE) - Summary

2019-S2929A (ACTIVE) - Sponsor Memo

2019-S2929A (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S2929A

Share this bill

Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

Bill Amendments

2019-S2929 - Details

2019-S2929 - Summary

2019-S2929 - Sponsor Memo

2019-S2929 - Bill Text download pdf

co-Sponsors

2019-S2929A (ACTIVE) - Details

2019-S2929A (ACTIVE) - Summary

2019-S2929A (ACTIVE) - Sponsor Memo

2019-S2929A (ACTIVE) - Bill Text download pdf

Comments