Bill Text: NY S02928 | 2019-2020 | 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 (Democrat 2-1)

Status: (Introduced - Dead) 2020-01-08 - REFERRED TO INSURANCE [S02928 Detail]

Download: New_York-2019-S02928-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                          2928
                               2019-2020 Regular Sessions
                    IN SENATE
                                    January 30, 2019
                                       ___________
        Introduced  by  Sens. BRESLIN, ADDABBO, SERINO -- read twice and ordered
          printed, and when printed to be committed to the Committee  on  Insur-
          ance
        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
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03106-01-9
        S. 2928                             2
     1  applicant for title insurance that covers real  property  used  predomi-
     2  nantly  for  residential  purposes,  and which consists of not more than
     3  four dwelling units, other than hotels and  motels,  an  amount  not  to
     4  exceed  the compensation or rebate received or paid, when such applicant
     5  knew that it was a violation to receive such rebate, or other  consider-
     6  ation  or  valuable  thing; provided, however, if such applicant did not
     7  know that it was a violation to receive such rebate, or other  consider-
     8  ation or valuable thing, he or she shall not be assessed a penalty under
     9  this [subdivision] subsection.
    10    (2)  For  the  purposes  of this subsection, "an inducement for, or as
    11  compensation for, any title insurance business"  shall  mean  a  benefit
    12  given  with  the intention to compensate or offer compensation, directly
    13  or indirectly, for any past or present placement for a particular  piece
    14  of title insurance business to any applicant, or person, firm, or corpo-
    15  ration  acting  as  agent,  representative, attorney, or employee of the
    16  owner, lessee, mortgagee or the prospective owner, lessee, or  mortgagee
    17  of the real property or any interest therein. Nothing contained in para-
    18  graph  one  of  this subsection to the contrary shall prohibit any title
    19  insurance corporation or title insurance  agent,  or  any  other  person
    20  acting  for  or  on  behalf  of the title insurance corporation or title
    21  insurance agent, from undertaking  any  usual  and  customary  marketing
    22  activity aimed at acquainting present and prospective customers with the
    23  advantages  of using a particular title insurer or title insurance agent
    24  that are not intended for the purpose of a reward for the future  place-
    25  ment of, or the past placement, of a particular piece of title insurance
    26  business.
    27    § 2. This act shall take effect immediately.