S T A T E O F N E W Y O R K ________________________________________________________________________ 2668 2011-2012 Regular Sessions I N S E N A T E January 28, 2011 ___________ 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: 1 Section 1. Paragraph 4 of subsection (a) of section 2101 of the insur- 2 ance law, as amended by chapter 687 of the laws of 2003, is amended to 3 read as follows: 4 (4) any [agent or other representative of any] EMPLOYEE OF AN AUTHOR- 5 IZED title insurance company OR LICENSED TITLE INSURANCE AGENT WHO 6 DEVOTES SUBSTANTIALLY ALL OF HIS SERVICE TO THE SOLICITATION OF TITLE 7 INSURANCE BUSINESS FROM THE INSURING PUBLIC AND WHO RECEIVES FOR THE 8 SOLICITATION OF SUCH TITLE INSURANCE COMPENSATION IN THE FORM OF SALARY 9 OR COMMISSION; 10 S 2. Section 2101 of the insurance law is amended by adding a new 11 subsection (w) to read as follows: 12 (W) IN THIS ARTICLE, AN "AGENT OF AN AUTHORIZED TITLE INSURANCE COMPA- 13 NY" MEANS ANY PERSON, FIRM OR CORPORATION AUTHORIZED IN WRITING BY AN 14 AUTHORIZED TITLE INSURANCE COMPANY TO PERFORM AND WHO ACTUALLY PERFORMS 15 THE FOLLOWING SERVICES: 16 (1) ISSUE COMMITMENTS TO INSURE OR REPORTS OF TITLE BASED UPON A 17 SEARCH OR EXAMINATION OF TITLE. 18 (2) DETERMINE INSURABILITY IN ACCORDANCE WITH UNDERWRITING RULES AND 19 STANDARDS PRESCRIBED BY THE TITLE INSURANCE COMPANY; AND, IN ADDITION, 20 PERFORMS, IN SUBSTANTIAL PART, THE FOLLOWING: 21 (A) COLLECTS PREMIUMS; 22 (B) CLOSES OR SETTLES TITLE; AND 23 (C) RECORDS CLOSING DOCUMENTS. EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD07279-01-1 S. 2668 2 1 S 3. Paragraphs 10 and 11 of subsection (g) of section 2103 of the 2 insurance law, paragraph 10 as amended and paragraph 11 as added by 3 chapter 687 of the laws of 2003, are amended to read as follows: 4 (10) in the discretion of the superintendent, as to all or any part of 5 the written examination or the prerequisite minimum ninety hour course 6 specified in subparagraph (B) of paragraph two of subsection (f) of this 7 section, of any individual seeking to be named a licensee or sublicen- 8 see, upon whom has been conferred the Chartered Property Casualty Under- 9 writer (C.P.C.U.) designation by the American Institute for Property and 10 Liability Underwriters; [or] 11 (11) of any individual who applies for an insurance agent license in 12 this state who was previously licensed for the same line or lines of 13 authority in another state, provided, however, that the applicant's home 14 state grants non-resident licenses to residents of this state on the 15 same basis. Such individual shall also not be required to complete any 16 prelicensing education. This exemption is only available if the person 17 is currently licensed in that state or if the application is received 18 within ninety days of the date of cancellation of the applicant's previ- 19 ous license and if the prior state issues a certification that, at the 20 time of cancellation, the applicant was in good standing in that state 21 or the state's producer database records, maintained by the National 22 Association of Insurance Commissioners, its affiliates or subsidiaries, 23 indicate that the producer is or was licensed in good standing for the 24 line of authority requested. An individual or entity licensed in another 25 state who moves to this state shall make an application within ninety 26 days of establishing legal residence to become a resident licensee. No 27 prelicensing education or examination shall be required of that person 28 to obtain any line of authority previously held in the prior state 29 except where the superintendent determines otherwise by regulation[.]; 30 OR 31 S 4. Subsection (g) of section 2103 of the insurance law is amended by 32 adding two new paragraphs 12 and 13 to read as follows: 33 (12) OF ANY APPLICANT SEEKING TO OBTAIN A LICENSE AS AN AGENT OF AN 34 AUTHORIZED TITLE INSURANCE COMPANY, WHEN SUCH APPLICANT IS A LICENSED 35 ATTORNEY AT LAW OF THIS STATE; OR 36 (13) IN THE DISCRETION OF THE SUPERINTENDENT, AS TO ALL OR ANY PART OF 37 THE WRITTEN EXAMINATION OR THE PREREQUISITE MINIMUM NINETY-HOUR COURSE 38 SPECIFIED IN SUBPARAGRAPH (B) OF PARAGRAPH TWO OF SUBSECTION (F) OF THIS 39 SECTION, OF ANY PERSON, FIRM OR CORPORATION SEEKING TO BE LICENSED AS AN 40 AGENT OF AN AUTHORIZED TITLE INSURANCE COMPANY IF THE SUPERINTENDENT IS 41 SATISFIED THAT THE APPLICANT POSSESSES THE REQUISITE KNOWLEDGE AND EXPE- 42 RIENCE WITH RESPECT TO THE SUBJECT MATTER OF THE PART OF THE EXAMINATION 43 BEING WAIVED. 44 S 5. Subsection (j) of section 2103 of the insurance law is amended by 45 adding a new paragraph 14 to read as follows: 46 (14) NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS SECTION, THERE SHALL 47 BE PAID TO THE SUPERINTENDENT FOR A TITLE INSURANCE AGENT'S LICENSE AN 48 INITIAL FEE OF TWO HUNDRED DOLLARS AND A RENEWAL FEE OF TWO HUNDRED 49 DOLLARS. THE TERM FOR SUCH LICENSE SHALL BE A MAXIMUM OF TWENTY-FOUR 50 MONTHS. ALL SUCH LICENSES SHALL EXPIRE ON JUNE THIRTIETH OF EACH EVEN 51 NUMBERED YEAR, AND THE SUPERINTENDENT SHALL HAVE AUTHORITY TO PRORATE 52 THE LICENSING FEE. 53 S 6. Subsection (n) of section 2103 of the insurance law, as amended 54 by chapter 687 of the laws of 2003, is amended to read as follows: 55 (n) Any insurance agent licensed pursuant to subsection (b) of this 56 section, EXCEPT AN AGENT OF AN AUTHORIZED TITLE INSURANCE COMPANY, is S. 2668 3 1 hereby authorized while so licensed, to act in the sale, solicitation or 2 negotiation for an insurance contract providing solely for disability 3 benefits written to meet minimum requirements of article nine of the 4 workers' compensation law. 5 S 7. Section 2103 of the insurance law is amended by adding a new 6 subsection (p) to read as follows: 7 (P) NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION, THE SUPER- 8 INTENDENT SHALL ISSUE A LICENSE TO ANY PERSON, FIRM OR CORPORATION, 9 AUTHORIZING SUCH LICENSEE TO ACT AS AN AGENT OF AN AUTHORIZED TITLE 10 INSURANCE COMPANY, WHEN SUCH PERSON, FIRM OR CORPORATION: 11 (1) FILES IN THE OFFICE OF THE SUPERINTENDENT, ON OR BEFORE JUNE 12 FIRST, TWO THOUSAND ELEVEN, OR WITHIN NINETY DAYS AFTER THE SUPERINTEN- 13 DENT HAS PROMULGATED APPLICATION FORMS, WHICHEVER DATE IS LATER AN 14 APPLICATION FOR SUCH LICENSE, IN SUCH FORM AND CONTAINING SUCH INFORMA- 15 TION AS THE SUPERINTENDENT PRESCRIBES; 16 (2) PAYS TO THE SUPERINTENDENT AN APPLICATION FEE OF TWO HUNDRED 17 DOLLARS; 18 (3) DEMONSTRATES TO THE SATISFACTION OF THE SUPERINTENDENT THAT SUCH 19 APPLICANT HAS REGULARLY AND CONTINUOUSLY ACTED AS AN AGENT OF AN AUTHOR- 20 IZED TITLE INSURANCE COMPANY FOR A PERIOD OF AT LEAST THREE YEARS IMME- 21 DIATELY PRECEDING THE FILING OF SUCH APPLICATION AND IS COMPETENT AND 22 TRUSTWORTHY TO ACT AS A TITLE INSURANCE AGENT; AND 23 (4) IS EIGHTEEN YEARS OF AGE OR OVER AT THE TIME OF THE ISSUANCE OF 24 SUCH LICENSE. SUCH LICENSE SHALL BE FOR A TERM EXPIRING ON JUNE THIRTI- 25 ETH, TWO THOUSAND THIRTEEN, AND RENEWALS THEREOF SHALL BE ISSUED PURSU- 26 ANT TO PARAGRAPH TWO OF SUBSECTION (J) OF THIS SECTION. 27 S 8. Paragraph 1 of subsection (a) of section 2115 of the insurance 28 law, as amended by chapter 418 of the laws of 2000, is amended to read 29 as follows: 30 (1) No insurer doing business in this state, and no agent or other 31 representative thereof, except as provided in subsection (b) [hereof] OF 32 THIS SECTION, shall pay any commission or other compensation to any 33 person, firm, association or corporation for acting as insurance agent 34 in this state, except to a licensed insurance agent of such insurer or 35 to a person described in paragraph two [or four] of subsection (a) of 36 section two thousand one hundred one of this article or except as 37 provided in subsection (c) of this section. For the purposes of this 38 section, "acting as insurance agent" shall not include the referral of a 39 person to a licensed insurance agent or broker that does not include a 40 discussion of specific insurance policy terms and conditions and where 41 the compensation for referral is not based upon the purchase of insur- 42 ance by such person. 43 S 9. The section heading and subsections (a) and (b) of section 2115 44 of the insurance law, paragraph 1 of subsection (a) as amended by chap- 45 ter 805 of the laws of 1984 and subsection (b) as amended by chapter 540 46 of the laws of 1996, are amended to read as follows: 47 Property/casualty insurance agents; AGENTS OF TITLE INSURANCE COMPA- 48 NIES; commissions. (a) (1) No insurer doing business in this state, and 49 no agent or other representative thereof, except as provided in 50 subsection (b) [hereof] OF THIS SECTION, shall pay any commission or 51 other compensation to any person, firm, association or corporation for 52 acting as insurance agent in this state, except to a licensed insurance 53 agent of such insurer or to a person described in paragraph two [or 54 four] of subsection (a) of section two thousand one hundred one of this 55 article or except as provided in subsection (c) of this section. S. 2668 4 1 (2) The term "licensed insurance agent" as used in this subsection 2 includes any agent authorized to act as such by a license issued and in 3 force pursuant to the provisions of subsection (b) of section two thou- 4 sand one hundred three of this article or authorized to act as such in 5 connection with contracts for disability benefits pursuant to the 6 provisions of subsection (n) of such section. 7 (b) This section shall not apply to any life insurance company, 8 fraternal benefit society, accident and health insurance company, health 9 maintenance organization[, title insurance company] nor to any agent or 10 representative of any such insurer, society or health maintenance organ- 11 ization, acting as such. 12 S 10. Section 2120 of the insurance law is amended by adding a new 13 subsection (e) to read as follows: 14 (E) AGENTS OF TITLE INSURANCE COMPANIES SHALL TREAT ALL FUNDS TAKEN 15 FOR THE ACCOUNT OF OTHERS, INCLUDING PREMIUMS COLLECTED BY THEM, IN 16 CONNECTION WITH ANY TITLE INSURANCE TRANSACTION AS FIDUCIARY FUNDS. 17 S 11. Within 120 days immediately after the effective date of this 18 act, the superintendent of insurance shall promulgate application forms 19 for persons, firms and corporations seeking to obtain a license as an 20 agent of an authorized title insurance company. 21 S 12. Each person, firm or corporation who has filed an application 22 for a license as an agent of an authorized title insurance company on or 23 before 90 days immediately after the superintendent of insurance has 24 promulgated application forms for such a license pursuant to section 25 eleven of this act, may act as such an agent without a license issued 26 pursuant to section 2103 of the insurance law until the superintendent 27 of insurance has finally determined the application for such license 28 filed by such person, firm or corporation. 29 S 13. This act shall take effect immediately, provided, however, that 30 sections 2103 and 2115 of the insurance law, as amended by sections 31 three, four, eight and nine of this act, shall not be applicable to 32 agents of authorized title insurance companies until the one hundred 33 eightieth day after this act shall have become a law or the ninetieth 34 day after the superintendent of insurance has promulgated application 35 forms pursuant to section eleven of this act, whichever date is later, 36 and provided further, however, that the amendments made to paragraph 1 37 of subsection (a) of section 2115 of the insurance law by section eight 38 of this act shall be deemed repealed on the same date as section 5 of 39 chapter 418 of the laws of 2000, as amended, when upon such date the 40 provisions of section nine of this act shall take effect.