FROM BOB TREUBER, EXECUTIVE DIRECTOR
Summary of Provisions of S5923 - Title Agent Licensing
This memorandum summarizes the key provisions of S5923, an act to amend the insurance law,
in relation to the licensing of agents of authorized title insurance corporations. The bill has been
drafted and proposed by the New York State Land Title Association using the most recent public
draft of a title insurance agents licensing bill prepared by the New York State Insurance
Department (predecessor of the Department of Financial Services) as a reference.
Section 1: Amends the opening paragraph of subsection (k) of section 2101 of the insurance law
by adding “title insurance agent” within the definition of “insurance producer”. It is necessary to
include title insurance agents separately from “insurance agents” because there are provisions in
this bill that apply only to title insurance agents.
Section 2: Repeals paragraph 4 of subsection (k) of section 2101 of the insurance law. The
opening paragraph of subsection (k) contains the definition of “insurance producer”, and
paragraphs 1- 12 are carve outs from the definition. Existing paragraph 4 provides that an agent
or other representative of a title insurance company was not included within the definition of an
insurance producer. This amendment is ministerial to make subsection (k) consistent with the
opening paragraph of subsection (k). With the elimination of paragraph 4, the remaining
paragraphs 5-12 had to be renumbered 4-11.
Section 3: Adds a new subsection (y) to section 2101 of the insurance law. Paragraph (1) of
subsection (y) defines a “title insurance agent”. Paragraph (2) prohibits a title insurance
corporation or an agent or representative of a title insurance corporation from paying a
percentage of the title insurance premium or other fees collected to any person or entity for
performing any of the functions of a title insurance agent, except to another licensed title
insurance agent. Paragraph (3) makes it clear that the term “title insurance agent” does not apply
to a regularly salaried employee or officer of a title insurance corporation or title insurance agent.
Section 4*: Amends subparagraph (A) of paragraph 1 of subsection (a) of section 2102 of the
insurance law by providing that no person, firm, association or corporation shall act as a title
insurance agent without being licensed pursuant to the provisions of the insurance law. This is
the operative provision requiring title insurance agents to be licensed.
Section 5: The amendments to subsection (a) of section 2109 of the insurance law are
conforming amendments that provides that the superintendent may issue a temporary title
insurance agent’s license in those same situations in which a temporary insurance agent’s license
may be issued.
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FROM BOB TREUBER, EXECUTIVE DIRECTOR
Section 6: The amendments to subsection (c) of section 2109 of the insurance law are
conforming amendments that provide that the privileges afforded the holder of a temporary
insurance agent’s license also apply to the holder of a temporary title insurance agent’s license.
Section 7: The amendment to paragraph 4 of subsection (e) of section 2109 of the insurance law
provides additional authority to the holder of a temporary title insurance agent’s license based on
the death of the licensee. Currently paragraph 4 of subsection (e) of section 2109 prohibits the
holder of a temporary license from soliciting, negotiating or selling new insurance. Because of
the nature of the business of other lines of insurance (e.g., life insurance, homeowner’s
insurance, car insurance) in which policies are often renewed based on premium notices sent by
the title insurance corporation, an insurance agent will continue to have a revenue stream even
while acting under a temporary insurance agent’s license, even if the insurance agent does not
solicit, negotiate or sell new insurance. But that is not the case with a title insurance agent. Each
title insurance premium is based on a newly issued policy; there are no renewal premiums in the
title insurance industry. Thus, premiums are generated only upon the issuance of a new title
insurance policy. In order to remain in business, a title insurance agent must have the ability to
solicit business, negotiate the terms of the title insurance policy and ultimately to sell a new title
insurance policy at the closing of title, while operating under a temporary title insurance agent’s
license.
Section 8 and Section 9: The amendment to paragraph 3 of subsection (f) of section 2109 of the
insurance law (Section 8) and the amendment to paragraph 2 of subsection (g) of section 2109 of
the insurance law (Section 9) are based on the same reasoning as set forth in the discussion
above of Section 7 of the bill, except that Section 8 is based on a temporary license issued in the
event the licensee is in the military, and Section 9 is based on a temporary license issued in the
event the licensee has become disabled.
Section 10*: The amendments to the section heading and subsections (a) and (b) of section 2110
of the insurance law are conforming sections, providing that the provisions therein that apply to
insurance agents also apply to title insurance agents.
Section 11: The amendments to subsections (a) and (d) of section 2112 of the insurance law are
conforming amendments to provide that the provisions therein that are applicable to insurance
agents are also applicable to title insurance agents.
Section 12: Adds a new Section 2113 to the insurance law. Subsection (a) of section 2113
prohibits payments from one title insurance agent to another title agent, which payment is based
on a percentage of the title insurance premium or other fees collected. This prohibition is
necessary to prevent sham title insurance agents who perform none of, or a limited amount of,
the core title services (see section 3 of the bill) from receiving a portion of the premium which is
calculated on a percentage basis. Nothing in this section is intended to prohibit payments by one
title insurance agent to another based on quantum meruit. Subsection (b) of section 2113
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FROM BOB TREUBER, EXECUTIVE DIRECTOR
prohibits a title insurance agent who is subject to a fee, fine or penalty imposed by the
superintendent from accepting reimbursement of such amounts from any source.
Section 13: The amendments to the section heading and subsections (a) and (c) of section 2120
of the insurance law are conforming amendments to provide that the provisions therein that are
applicable to insurance agents are also applicable to title insurance agents. The amendments also
include changes to make the provisions gender neutral.
Section 14: The amendments to the section heading and subsection (a) of section 2122 of the
insurance law replace the categories of insurance agent and insurance broker with the more
inclusive language of insurance producer, which includes title insurance agent pursuant to the
amendments made pursuant to section 1 of the bill.
Section 15: The amendments to subsections (a) and (b) of section 2128 of the insurance law
replace specific types of entities (insurance agent, insurance broker, insurance consultant, excess
line broker, reinsurance intermediary or insurance adjuster) with the broad category “licensee
subject to this chapter”. This change is a carryover from a draft title insurance agent licensing
bill previously proposed by the Department of Financial services.
In addition, as to subsection (b), which requires licensees to file disclosure statements with
respect to insurance coverages placed or services rendered to the state a by a licensee, the
amendment provides that title insurance corporations and title insurance companies only have to
make such disclosure annually. This is proposed to lessen the burden on title insurance
corporations and title insurance companies who issue many title insurance policies insuring
mortgages made to, for example, SONYMA, industrial development agencies, the urban
development corporation, and other public benefit corporations. In addition, disclosure
statements made pursuant to section 2128 shall be deemed trade secrets exempt from FOIL
requests. Among the information that is to be protected is the name of the title insurance agent’s
or title insurance corporation’s client, often the attorney for the mortgagor who has placed the
order for title insurance with the agent or underwriter. Public disclosure of the name of the client
would provide critical information to competitors of the names of attorneys who are engaged in
the practice of representing mortgagors who borrow money from the state, its agencies and
departments, public benefit corporations, municipalities and other governmental subdivisions in
this state.
Section 16: The amendment to subsection (b) of section 2132 of the insurance law exempts
attorneys licensed to practice in New York state from the continuing education requirements
otherwise required of title insurance agents.
Section 17: Adds a new section 2139 to the insurance law. Section 2139 is the main provision
authorizing the licensing of title insurance agents and provides the requirements before a person
or entity may be licensed. Key provisions of this section include:
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FROM BOB TREUBER, EXECUTIVE DIRECTOR

provides requirements for title insurance agents similar to those required of other insurance
agents

provides for an exam to demonstrate competency for licensing as title insurance agent

exempts from competency exam:
 individuals previously licensed as title insurance agents by the superintendent applying
within two years of the termination of their previously issued title insurance agent license
 licensed attorneys in this state in good standing with the NYS Office of Court
Administration
 non-resident individuals licensed in their home state for at least five years provided home
state offers reciprocal provision
 applicants filing an application within one year of the effective date who demonstrates
that they have regularly and continuously performed functions of title insurance agent in
NYS for five years prior to application

provides that license renewal is dependent on compliance with continuing education
requirement
The attached chart compares the proposed new section 2139 to existing section 2103 of the
insurance law (which provides requirements for the licensing of other insurance agents).
Section 18: Adds a new section 2140 to the insurance law, which section 2140 is specific
legislation applicable only to title insurance agents. It provides the continuing education
requirements for title insurance agents.
Section 19: The amendments to section 2134 are conforming sections, providing that the
provisions therein that apply to insurers and insurance agents also apply to title insurance agents.
Section 20: Section 2324 of the insurance law prohibits illegal rebating of premiums. The
amendment to subsection (e) of section 2324 of the insurance law provides that section 324 shall
not apply to any contract or policy of title insurance. The reason for the carve out of title
insurance is that subsection (d) of section 6409 of the insurance law, as amended by Section 21
of the bill, contains the anti-rebating provisions applicable to title insurance.
Section 21: Amends subsection (d) of section 6409 of the insurance law to add title insurance
agents to the entities subject to the anti-rebating provisions of that subsection. In addition, the
penalties for violating the anti-rebating provisions has been expanded to include not only the
recipient of the illegal rebate but also the person or entity who pays the illegal rebate. In
addition, the amount of the fine or penalty for the recipient has been increased as an additional
inducement not to accept the illegal rebate; and the fine or penalty is even larger yet for the
person or entity who has made the illegal rebate, even to the point of disgorging all of the
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FROM BOB TREUBER, EXECUTIVE DIRECTOR
premium received by the title insurance agent or corporation issuing the title insurance policy
and collecting the premium.
Section 22: Adds a new paragraph 54 to subsection (a) of section 107 of the insurance law.
Paragraph 54 provides the definition of title insurance agent to the definitional section (section
107) of the insurance law.
Section 23: Provides for the bill to become effective 180 days after being signed into law and
authorizes the Department of Financials Services to adopt any rule or regulation necessary to
implement this law.
*Note that although the provisions in the amended sections apply to insurance producers, of
which a title insurance agent is now included by reason of the amendment made pursuant to
Section 1 of the bill, the amendments to these sections which specifically include reference to
title insurance agents may be superfluous, but have been included to conform to early drafts of a
title insurance agents licensing bill prepared by the New York State Department of Financial
Services.
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FROM BOB TREUBER, EXECUTIVE DIRECTOR
Cross reference table
Subsection
S5923
Insurance Law 2103
(a)
(b)
(b) requires at least one sublicensee to
have a financial interest in the title insurance
agent
(c)
(d) 1
(a) and (b)
(c)
No corresponding provision
(d) 2
(e)
(f)
(g) 1
(g) 2
(g) 3
(h)
(i)
(j) 1
(j) 2
(j) 3
(j) 4 a
(j) 4 b
(j) 5 a
(j) 5 b
(j) 5 c
(j) 6
(j) 7
(j) 8
(j) 9
(j) 10
(j) 11
(j) 12
(k)
(d)
(e), but no requirement for a
fee
No similar provision, but
appeared in prior draft by DFS
(Scott please check this
statement)
(f) 1
(f) 2 -similar in intent
(g) 7
no comparable
(g) 11
no comparable
(h)
(j) 2 - part
(j) 2 - part
(j) 3 (similar)
(j) 4 a
(j) 4 c
(j) 5 a
section 2132 (c)
(j) 5 b
(j) 7
(j) (8) (a)
(j) (8) (b)
(j) 10
(j) 11
(j) 12
(o)
(i) in part; new as to reference
to 6409
(l) new
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