Bill Text: NY S06704 | 2017-2018 | General Assembly | Introduced

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Bill Title: Relates to the definition of the phrase "an inducement for, or as compensation for, any title insurance business" as it relates to the prohibition against certain actions.

Spectrum: Slight Partisan Bill (Republican 3-1)

Status: (Engrossed - Dead) 2018-01-16 - referred to codes [S06704 Detail]

Download: New_York-2017-S06704-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                          6704
                               2017-2018 Regular Sessions
                    IN SENATE
                                      June 14, 2017
                                       ___________
        Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
          printed to be committed to the Committee on Rules
        AN ACT to amend the insurance law, in relation  to  the  prohibition  of
          commissions and rebates
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Subsection (d) of section 6409 of  the  insurance  law,  as
     2  amended  by  section  17 of part V of chapter 57 of the laws of 2014, is
     3  amended to read as follows:
     4    (d) (1) No title insurance corporation, title insurance agent, or  any
     5  other  person acting for or on behalf of the title insurance corporation
     6  or title insurance agent, shall offer or make, directly  or  indirectly,
     7  any  rebate of any portion of the fee, premium or charge made, or pay or
     8  give to any applicant, or to any person, firm, or corporation acting  as
     9  agent, representative, attorney, or employee of the owner, lessee, mort-
    10  gagee or the prospective owner, lessee, or mortgagee of the real proper-
    11  ty  or  any interest therein, either directly or indirectly, any commis-
    12  sion, any part of its fees or charges, or  any  other  consideration  or
    13  valuable  thing, as an inducement for, or as compensation for, any title
    14  insurance business, nor shall any applicant, or  any  person,  firm,  or
    15  corporation  acting  as  agent, representative, attorney, or employee of
    16  the owner, lessee, mortgagee or of the  prospective  owner,  lessee,  or
    17  mortgagee  of  the  real  property or anyone having any interest in real
    18  property knowingly receive, directly or indirectly, any such  rebate  or
    19  other consideration or valuable thing. Any person or entity who violates
    20  this  section  shall  be subject to a penalty of [(1)] (i) five thousand
    21  dollars; or [(2)] (ii) up to ten times the amount of any compensation or
    22  rebate received or paid in the case of a title insurance corporation  or
    23  title insurance agent; or [(3)] (iii) up to five times the amount of any
    24  compensation or rebate received or paid; or [(4)] (iv) in the case of an
    25  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.
                                                                   LBD13184-01-7
        S. 6704                             2
     1  nantly for residential purposes, and which consists  of  not  more  than
     2  four  dwelling  units,  other  than  hotels and motels, an amount not to
     3  exceed the compensation or rebate received or paid, when such  applicant
     4  knew  that it was a violation to receive such rebate, or other consider-
     5  ation or valuable thing; provided, however, if such  applicant  did  not
     6  know  that it was a violation to receive such rebate, or other consider-
     7  ation or valuable thing, he or she shall not be assessed a penalty under
     8  this [subdivision] subsection.
     9    (2) For the purposes of this subsection, "an  inducement  for,  or  as
    10  compensation  for,  any  title  insurance business" shall mean a benefit
    11  given with the intention to compensate or offer  compensation,  directly
    12  or  indirectly, for any past or present placement for a particular piece
    13  of title insurance business to any applicant, or person, firm, or corpo-
    14  ration acting as agent, representative, attorney,  or  employee  of  the
    15  owner,  lessee, mortgagee or the prospective owner, lessee, or mortgagee
    16  of the real property or any interest therein. Nothing contained in para-
    17  graph one of this subsection to the contrary shall  prohibit  any  title
    18  insurance  corporation  or  title  insurance  agent, or any other person
    19  acting for or on behalf of the  title  insurance  corporation  or  title
    20  insurance  agent,  from  undertaking  any  usual and customary marketing
    21  activity aimed at acquainting present and prospective customers with the
    22  advantages of using a particular title insurer or title insurance  agent
    23  that  are not intended for the purpose of a reward for the future place-
    24  ment of, or the past placement, of a particular piece of title insurance
    25  business.
    26    § 2. This act shall take effect immediately.