S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7127

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                             March 23, 2009
                               ___________

Introduced  by  M. of A. MORELLE, SPANO, REILLY -- Multi-Sponsored by --
  M. of A. BING, DESTITO, GALEF, JOHN -- (at request  of  the  New  York
  State Insurance Department) -- read once and referred to the Committee
  on Insurance

AN  ACT  to  amend  the  insurance  law, in relation to the licensing of
  agents of authorized  title  insurance  corporations;  and  to  repeal
  certain provisions of such law relating thereto

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The opening paragraph of subsection (k) of section 2101  of
the  insurance  law,  as  added  by  chapter 687 of the laws of 2003, is
amended to read as follows:
  In this article, "insurance producer" means an insurance agent,  TITLE
INSURANCE  AGENT,  insurance  broker,  reinsurance  intermediary, excess
lines broker, or any other person required to be licensed under the laws
of this state to sell, solicit or negotiate insurance. Such  term  shall
not include:
  S  2.  Paragraph  4 of subsection (k) of section 2101 of the insurance
law is REPEALED and paragraphs 5, 6, 7, 8, 9 and 10 are renumbered para-
graphs 4, 5, 6, 7, 8 and 9.
  S 3. Section 2101 of the insurance law is  amended  by  adding  a  new
subsection (v) to read as follows:
  (V)(1)  IN  THIS CHAPTER, "TITLE INSURANCE AGENT" MEANS ANY AUTHORIZED
OR ACKNOWLEDGED AGENT OF A TITLE INSURANCE CORPORATION, AND  ANY  SUB-A-
GENT OR OTHER REPRESENTATIVE OF SUCH AN AGENT, WHO:
  (A)  ACTS AS AN AGENT IN THE SOLICITATION OF, NEGOTIATION FOR, OR SALE
OF, A TITLE INSURANCE POLICY;
  (B) ISSUES COMMITMENTS TO INSURE OR REPORTS  OF  TITLE  BASED  UPON  A
SEARCH OR AN EXAMINATION OF TITLE; OR

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09043-04-9

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  (C)  DETERMINES INSURABILITY IN ACCORDANCE WITH UNDERWRITING RULES AND
STANDARDS PRESCRIBED BY THE TITLE  INSURANCE  CORPORATION  AND  WHO,  IN
SUBSTANTIAL PART, ON BEHALF OF THE TITLE INSURANCE CORPORATION:
  (I)  COLLECTS PREMIUMS AND OTHER FUNDS IN CONNECTION WITH THE ISSUANCE
OF A TITLE INSURANCE POLICY;
  (II) CLOSES  OR  SETTLES  TITLE,  INCLUDING  THE  CLEARANCE  OF  TITLE
EXCEPTIONS  IN CONNECTION WITH THE ISSUANCE OF A TITLE INSURANCE POLICY;
OR
  (III) MARKS UP A TITLE INSURANCE COMMITMENT TO BIND A TITLE  INSURANCE
CORPORATION OR PREPARES AND ISSUES A TITLE INSURANCE POLICY ON BEHALF OF
A TITLE INSURANCE CORPORATION.
  (2)  SUCH  TERM  SHALL  NOT  INCLUDE  ANY  REGULAR SALARIED OFFICER OR
EMPLOYEE OF AN AUTHORIZED TITLE INSURANCE CORPORATION OR OF  A  LICENSED
TITLE  INSURANCE  AGENT,  WHO  DOES  NOT  RECEIVE  A COMMISSION OR OTHER
COMPENSATION FOR SERVICES WHICH  COMMISSION  OR  OTHER  COMPENSATION  IS
DIRECTLY DEPENDENT UPON THE AMOUNT OF TITLE INSURANCE BUSINESS DONE.
  S  4.  The  section  heading  of  section 2103 of the insurance law is
amended to read as follows:
  Insurance agents; TITLE INSURANCE AGENTS; licensing.
  S 5. Subsection (b) of section 2103 of the insurance law,  as  amended
by chapter 687 of the laws of 2003, is amended to read as follows:
  (b)  The superintendent may issue a license to any person, firm, asso-
ciation or corporation who or which has complied with  the  requirements
of  this  chapter, authorizing the licensee to act as INSURANCE agent OR
TITLE INSURANCE AGENT of any authorized insurer, other than  an  insurer
specified  in subsection (b) of section two thousand one hundred fifteen
of this article, with respect to the lines of authority for accident and
health or sickness, property, casualty, personal lines or any other line
of authority granted other than life, and  variable  life  and  variable
annuity products, which such insurer is authorized to do in this state.
  S 6. Subsection (c) of section 2103 of the insurance law is amended to
read as follows:
  (c)  Any  such license issued to a firm or association shall authorize
only the members thereof, named in such license as sub-licensees, to act
individually as agents thereunder, and any  such  license  issued  to  a
corporation  shall  authorize  only  the officers and directors thereof,
named in such license as sub-licensees, to act  individually  as  agents
thereunder.  Every  sub-licensee,  acting  as  insurance  agent OR TITLE
INSURANCE AGENT pursuant to such a license shall be authorized so to act
only in the name of the licensee. IN THE CASE OF A LICENSE ISSUED  TO  A
TITLE  INSURANCE AGENT, AT LEAST ONE DESIGNATED SUB-LICENSEE MUST HAVE A
FINANCIAL OR OTHER BENEFICIAL INTEREST IN THE LICENSEE.
  S 7. Subsection (e) of section 2103 of the insurance law,  as  amended
by chapter 687 of the laws of 2003, is amended to read as follows:
  (e)  Before  any original insurance agent's license OR TITLE INSURANCE
AGENT'S LICENSE is issued there shall be on file in the  office  of  the
superintendent  an  application by the prospective licensee in such form
or forms and supplements, and containing information the  superintendent
prescribes  and for each business entity, the sub-licensee or sub-licen-
sees named in the application shall be designated  responsible  for  the
business  entity's  compliance  with the insurance laws, rules and regu-
lations of this state.
  S 8. Subparagraph (B) of paragraph 2 of subsection (f) of section 2103
of the insurance law, as amended by chapter 687 of the laws of 2003,  is
amended to read as follows:

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  (B)  For  individuals  seeking  to  qualify  to obtain a license under
subsection (b) of this section, not more than [six] SEVEN types of exam-
inations, each adapted to test the qualifications of an individual  with
respect to the kinds of insurance business specified in such classifica-
tion.  Every such individual shall be required to pass the type or types
of examination prescribed by the superintendent for the line or lines of
authority for which the license is sought. No individual shall be deemed
qualified to take the examination  unless  he  shall  have  successfully
completed  a course or courses, approved as to method and content by the
superintendent, covering the principal branches of the  insurance  busi-
ness  and  requiring  not  less  than ninety hours of classroom work, in
institutions of learning meeting the standards prescribed  by  paragraph
one  of  subsection (a) of section two thousand one hundred four of this
article; provided, however, with respect to a license issued pursuant to
subsection (b) of this section for a personal line of authority OR TITLE
INSURANCE AGENT, there shall be required not less than  forty  hours  of
such classroom work.
  S  9.  Paragraph  7 of subsection (g) of section 2103 of the insurance
law, as renumbered by chapter 137 of the laws of  1986,  is  amended  to
read as follows:
  (7)  of  any applicant who has passed the written examination given by
the superintendent for an insurance agent's license OR  TITLE  INSURANCE
AGENT'S  LICENSE  and  was  licensed  as such or of an applicant who was
licensed as an insurance agent OR TITLE INSURANCE AGENT but did not pass
such an examination, provided the applicant  applies  within  two  years
following the date of termination of his license;
  S  10.  Paragraphs  10 and 11 of subsection (g) of section 2103 of the
insurance law are renumbered paragraphs 11 and 12 and a new paragraph 10
is added to read as follows:
  (10) OF ANY APPLICANT SEEKING TO OBTAIN A LICENSE AS A TITLE INSURANCE
AGENT, WHEN SUCH APPLICANT IS A LICENSED ATTORNEY AT LAW OF THIS STATE;
  S 11. Subsection (h) of section 2103 of the insurance law  is  amended
to read as follows:
  (h)  The  superintendent  may  refuse  to  issue any insurance agent's
license OR TITLE INSURANCE AGENT'S LICENSE if, in [his] THE  SUPERINTEN-
DENT'S judgment, the proposed licensee or any sub-licensee is not trust-
worthy  and  competent  to act as such agent, or has given cause for the
revocation or suspension of such a license, or has failed to comply with
any prerequisite for the issuance of such license.
  S 12. Paragraph 5 of subsection (j) of section 2103 of  the  insurance
law,  as added by chapter 769 of the laws of 1984, is amended to read as
follows:
  (5) Before the renewal of  any  insurance  agent's  license  OR  TITLE
INSURANCE  AGENT'S  LICENSE  shall be issued, the following requirements
shall have been met:
  (A) The licensee shall have filed a completed renewal  application  in
such  form or forms and supplements thereto and containing such informa-
tion as the superintendent may prescribe.
  (B) The licensee shall have paid such fees as are prescribed  in  this
section.
  S  13.  Subparagraph  (A)  of paragraph 8 of subsection (j) of section
2103 of the insurance law, as amended by chapter  687  of  the  laws  of
2003, is amended to read as follows:
  (A)  The superintendent may in issuing a renewal license dispense with
the requirements of a verified application by any individual licensee or
sub-licensee who, by reason of being engaged in any military service for

A. 7127                             4

the United States, is unable  to  make  personal  application  for  such
renewal  license,  upon  the  filing of an application on behalf of such
individual, in such form as the superintendent shall prescribe, by  some
person  or  persons  who in his judgment have knowledge of the facts and
who make affidavit showing such military service and  the  inability  of
such  insurance agent OR TITLE INSURANCE AGENT to make personal applica-
tion.
  S 14. Paragraph 12 of subsection (j) of section 2103 of the  insurance
law,  as added by chapter 769 of the laws of 1984, is amended to read as
follows:
  (12) Except where a corporation, association or firm  licensed  as  an
insurance agent OR TITLE INSURANCE AGENT is applying to add a sub-licen-
see,  or  the  date  of  the expiration of the license is changed, there
shall be no fee required for the issuance of an amended license.
  S 15. Subsection (l) of section 2103 of the insurance law  is  amended
to read as follows:
  (l)  Any licensee may at any time while such license is in force apply
to the superintendent for an additional license authorizing such  licen-
see,  and  the  sub-licensees  named in such existing license, to act as
insurance agents OR TITLE INSURANCE AGENTS for additional insurers.  The
superintendent  may,  after  the  requirements of this chapter have been
complied with, issue such additional license.
  S 16. Section 2103 of the insurance law is amended by adding  two  new
subsections (p) and (q) to read as follows:
  (P)(1)  NOTWITHSTANDING  ANY  OTHER  PROVISIONS  OF  THIS SECTION, THE
SUPERINTENDENT MAY ISSUE A LICENSE TO ANY PERSON, FIRM, OR  CORPORATION,
AUTHORIZING  SUCH  LICENSEE TO ACT AS A TITLE INSURANCE AGENT, WHEN SUCH
PERSON, FIRM OR CORPORATION:
  (A) FILES IN THE OFFICE OF THE SUPERINTENDENT, ON  OR  BEFORE  JANUARY
FIRST,  TWO THOUSAND TEN, OR WITHIN NINETY DAYS AFTER THE SUPERINTENDENT
HAS PROMULGATED APPLICATION FORMS, WHICHEVER DATE IS LATER, AN  APPLICA-
TION  FOR  SUCH LICENSE, IN SUCH FORM AND CONTAINING SUCH INFORMATION AS
THE SUPERINTENDENT PRESCRIBES;
  (B) PAYS TO THE SUPERINTENDENT THE SUM OF FORTY DOLLARS FOR EACH  YEAR
OR FRACTION OF A YEAR IN WHICH THE LICENSE SHALL BE VALID;
  (C)  DEMONSTRATES  TO THE SATISFACTION OF THE SUPERINTENDENT THAT SUCH
APPLICANT HAS REGULARLY AND CONTINUOUSLY  ACTED  AS  A  TITLE  INSURANCE
AGENT  FOR  A  PERIOD  OF  AT LEAST FIVE YEARS IMMEDIATELY PRECEDING THE
FILING OF SUCH APPLICATION AND IS COMPETENT AND TRUSTWORTHY TO ACT AS  A
TITLE INSURANCE AGENT; AND
  (D)  IS  AT LEAST EIGHTEEN YEARS OF AGE AT THE TIME OF THE ISSUANCE OF
SUCH LICENSE.
  (2) SUCH LICENSE ISSUED PURSUANT TO THIS SUBSECTION FOR AN INDIVIDUAL,
WHO WAS BORN IN AN ODD NUMBERED YEAR, SHALL EXPIRE ON  THE  INDIVIDUAL'S
BIRTHDAY  IN THE NEXT ODD NUMBERED YEAR. SUCH LICENSE ISSUED PURSUANT TO
THIS SUBSECTION FOR AN INDIVIDUAL, WHO WAS  BORN  IN  AN  EVEN  NUMBERED
YEAR,  SHALL  EXPIRE  ON  THE  INDIVIDUAL'S  BIRTHDAY  IN  THE NEXT EVEN
NUMBERED YEAR.
  (Q) NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION, NO COURSE  OF
STUDY  OR  WRITTEN  EXAMINATION  SHALL  BE  REQUIRED WITH RESPECT TO ANY
APPLICANT FOR A TITLE INSURANCE AGENT'S LICENSE WHO FILES AN APPLICATION
UNDER THIS SECTION WITHIN ONE YEAR AFTER  THE  EFFECTIVE  DATE  OF  THIS
SUBSECTION  AND  WHO DEMONSTRATES TO THE SATISFACTION OF THE SUPERINTEN-
DENT THAT SUCH APPLICANT OR ITS PROSPECTIVE SUB-LICENSEE  HAS  REGULARLY
AND  CONTINUOUSLY PERFORMED THE FUNCTIONS OF A TITLE INSURANCE AGENT FOR

A. 7127                             5

A PERIOD OF AT LEAST FIVE YEARS IMMEDIATELY PRECEDING THE FILING OF SUCH
APPLICATION.
  S 17. Subsection (a) of section 2109 of the insurance law, paragraph 3
as  amended  by  chapter  687 of the laws of 2003, is amended to read as
follows:
  (a)  The  superintendent  may  issue  a  temporary  insurance  agent's
LICENSE,  TITLE INSURANCE AGENT'S LICENSE or insurance broker's license,
or both, AN INSURANCE AGENT'S AND INSURANCE  BROKER'S  LICENSE,  without
requiring  the applicant to pass a written examination or to satisfy the
requirements of subsection (c) of section two thousand one hundred  four
of this article except as to age, in the case of a license issued pursu-
ant  to  paragraph  two  [hereof]  OF  THIS SUBSECTION, in the following
cases:
  (1) in the case of the death of a person who at the time of his  death
was  a licensed accident and health insurance agent under subsection (a)
of section two thousand one hundred three of this  article,  a  licensed
insurance  agent  OR LICENSED TITLE INSURANCE AGENT under subsection (b)
of such section or a licensed insurance broker:
  (A) to the executor or administrator of the estate  of  such  deceased
agent or broker;
  (B) to a surviving next of kin of such deceased agent or broker, where
no  administrator  of  his estate has been appointed and no executor has
qualified under his duly probated will;
  (C) to the surviving member or members of a firm or association, which
at the time of the death of a  member  was  such  a  licensed  insurance
agent, LICENSED TITLE INSURANCE AGENT or licensed insurance broker; or
  (D)  to  an officer or director of a corporation upon the death of the
only officer or director who was qualified as a sub-licensee or  to  the
executor  or  administrator  of  the  estate of such deceased officer or
director;
  (2) to any person who may be designated by a person licensed  pursuant
to  this  chapter  as  an  insurance  agent, TITLE INSURANCE AGENT or an
insurance broker, or both AN INSURANCE AGENT AND INSURANCE  BROKER,  and
who  is  absent  because of service in any branch of the armed forces of
the United States, including  a  partnership  or  corporation  which  is
licensed pursuant to this chapter as an insurance agent, TITLE INSURANCE
AGENT  or  as an insurance broker, or both AN INSURANCE AGENT AND INSUR-
ANCE BROKER, in a case where the sub-licensee or all  sub-licensees,  if
more  than one, named in the license or licenses issued to such partner-
ship or corporation is or are absent because of service in any branch of
the armed forces of the United States; and
  (3) to the next of kin of a person who has become totally disabled and
prevented from pursuing any of the duties of his or her occupation,  and
who at the commencement of his or her disability was a licensed accident
and  health insurance agent under subsection (a) of section two thousand
one hundred three  of  this  article,  a  licensed  insurance  agent  OR
LICENSED TITLE INSURANCE AGENT under subsection (b) of such section or a
licensed insurance broker.
  S  18.  Subsection (c) of section 2109 of the insurance law is amended
to read as follows:
  (c) Such license or licenses shall authorize  the  person  or  persons
named  therein to renew the business of the deceased, absent or disabled
INSURANCE agent, TITLE INSURANCE AGENT, or INSURANCE broker, or both  AN
INSURANCE AGENT AND INSURANCE BROKER, as the case may be, or of the firm
or,  in  the case of a license issued pursuant to paragraph one or three
of subsection (a) [hereof] OF THIS SECTION, the association whose  busi-

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ness  is  being  continued  thereunder, each such agent, broker, firm or
association being referred to in this section  as  "original  licensee",
expiring  during  the period in which such temporary license or licenses
are in force, to collect premiums due and payable to the original licen-
see  or,  in  the  case of a license issued pursuant to paragraph one of
subsection (a) [hereof] OF THIS SECTION, to his estate, and  to  perform
such  other  acts  as an insurance agent, TITLE INSURANCE AGENT or as an
insurance broker, or both AN INSURANCE AGENT AND  INSURANCE  BROKER,  as
the  case  may be, as are incidental to the continuance of the insurance
business of such original licensee.
  S 19. Subsections (a) and (d) of section 2112 of  the  insurance  law,
subsection  (a)  as  amended  by  chapter  540  of  the laws of 1996 and
subsection (d) as amended by chapter  687  of  the  laws  of  2003,  are
amended to read as follows:
  (a)  Every  insurer,  fraternal  benefit society or health maintenance
organization doing business in this state shall file  a  certificate  of
appointment in such form as the superintendent may prescribe in order to
appoint  insurance  agents  OR  TITLE INSURANCE AGENTS to represent such
insurer, fraternal benefit society or health maintenance organization.
  (d) Every insurer, fraternal benefit  society  or  health  maintenance
organization  or  insurance producer or the authorized representative of
the insurer, fraternal benefit society, health maintenance  organization
or  insurance  producer  doing business in this state shall, upon termi-
nation of the certificate of appointment as set forth in subsection  (a)
of this section of any insurance agent OR TITLE INSURANCE AGENT licensed
in this state, or upon termination for cause for activities as set forth
in  subsection (a) of section two thousand one hundred ten of this arti-
cle, of the certificate of appointment, of employment, of a contract  or
other  insurance business relationship with any insurance producer, file
with the superintendent within thirty days a statement, in such form  as
the  superintendent  may prescribe, of the facts relative to such termi-
nation for cause. The insurer, fraternal benefit society, health mainte-
nance organization, insurance producer or the authorized  representative
of  the insurer, fraternal benefit society, health maintenance organiza-
tion or insurance producer shall  provide,  within  fifteen  days  after
notification  has  been sent to the superintendent, a copy of the state-
ment filed with the superintendent to the insurance producer at his,  or
her  or  its  last  known  address  by  certified  mail,  return receipt
requested, postage prepaid or by overnight delivery using  a  nationally
recognized  carrier.    Every statement made pursuant to this subsection
shall be deemed a privileged communication.
  S 20. The section heading and paragraph 1 of subsection (a) of section
2115 of the insurance law, paragraph 1 of subsection (a) as  amended  by
chapter 418 of the laws of 2000, are amended to read as follows:
  Property/casualty  insurance  agents;  TITLE INSURANCE AGENTS; commis-
sions.
  (1) No insurer doing business in this state, and  no  agent  or  other
representative thereof, except as provided in subsection (b) [hereof] OF
THIS  SECTION,  shall  pay  any  commission or other compensation to any
person, firm, association or corporation for acting as  insurance  agent
OR  TITLE  INSURANCE AGENT in this state, except to a licensed insurance
agent OR LICENSED TITLE INSURANCE AGENT of such insurer or to  a  person
described  in  paragraph  two [or four] of subsection (a) of section two
thousand one hundred one of  this  article  or  except  as  provided  in
subsection  (c)  of  this  section.  For  the  purposes of this section,
"acting as insurance agent" shall not include the referral of  a  person

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to  a  licensed  insurance  agent  or  broker  that  does  not include a
discussion of specific insurance policy terms and conditions  and  where
the  compensation  for referral is not based upon the purchase of insur-
ance by such person.
  S  21.  Paragraph 1 of subsection (a) of section 2115 of the insurance
law, as amended by chapter 805 of the laws of 1984, is amended  to  read
as follows:
  (1)  No  insurer  doing  business in this state, and no agent or other
representative thereof, except as provided in subsection (b) [hereof] OF
THIS SECTION, shall pay any commission  or  other  compensation  to  any
person,  firm,  association or corporation for acting as insurance agent
OR TITLE INSURANCE AGENT in this state, except to a  licensed  insurance
agent  OR  LICENSED TITLE INSURANCE AGENT of such insurer or to a person
described in paragraph two [or four] of subsection (a)  of  section  two
thousand  one  hundred  one  of  this  article  or except as provided in
subsection (c) of this section.
  S 22. Subsection (b) of section 2115 of the insurance law, as  amended
by chapter 540 of the laws of 1996, is amended to read as follows:
  (b)  This  section  shall  not  apply  to  any life insurance company,
fraternal benefit society, accident and health insurance company, health
maintenance organization[, title insurance company] nor to any agent  or
representative of any such insurer, society or health maintenance organ-
ization, acting as such.
  S 23. Subsections (a) and (c) of section 2120 of the insurance law are
amended to read as follows:
  (a) Every insurance agent, TITLE INSURANCE AGENT and [every] insurance
broker  acting as such in this state shall be responsible in a fiduciary
capacity for all funds received or collected as insurance  agent,  TITLE
INSURANCE  AGENT or insurance broker, and shall not, without the express
consent of his, HER or its principal, mingle any such  funds  with  his,
HER  or  its own funds or with funds held by him, HER or it in any other
capacity.
  (c) This section shall not require any  such  INSURANCE  agent,  TITLE
INSURANCE  AGENT,  INSURANCE broker or reinsurance intermediary to main-
tain a separate bank deposit for the funds of each  such  principal,  if
and  as long as the funds so held for each such principal are reasonably
ascertainable from the books of  account  and  records  of  such  agent,
broker or reinsurance intermediary, as the case may be.
  S  24.  The  section heading and subsection (a) of section 2122 of the
insurance law are amended to read as follows:
  Advertising by insurance [agents and brokers] PRODUCERS.  (a)  (1)  No
insurance  [agent  or  insurance broker] PRODUCER shall make or issue in
this state any advertisement, sign, pamphlet, circular,  card  or  other
public  announcement purporting to make known the financial condition of
any insurer, unless the  same  shall  conform  to  the  requirements  of
section one thousand three hundred thirteen of this chapter.
  (2)  No  insurance [agent, insurance broker] PRODUCER or other person,
shall, by any advertisement or public announcement in this  state,  call
attention to any unauthorized insurer or insurers.
  S 25. Subsections (a) and (b) of section 2128 of the insurance law are
amended to read as follows:
  (a)  Notwithstanding  the  provisions  of  sections two thousand three
hundred twenty-four and four thousand two hundred  twenty-four  of  this
chapter,  no  insurance  agent, TITLE INSURANCE AGENT, insurance broker,
insurance consultant, excess line broker,  reinsurance  intermediary  or
insurance adjuster shall receive any commissions or fees or shares ther-

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eof  in  connection  with  insurance  coverages  placed for or insurance
services rendered to the state, its  agencies  and  departments,  public
benefit corporations, municipalities and other governmental subdivisions
in  this  state,  unless  such  insurance  agent, TITLE INSURANCE AGENT,
insurance broker, insurance consultant, excess line broker,  reinsurance
intermediary  or  insurance adjuster actually placed insurance coverages
on behalf of or rendered insurance services to the state,  its  agencies
and  departments,  public benefit corporations, municipalities and other
governmental subdivisions in this state.
  (b) The superintendent shall, by regulation, require insurance agents,
TITLE INSURANCE AGENTS, insurance brokers, insurance consultants, excess
line brokers, reinsurance intermediaries and insurance adjusters to file
disclosure statements with the insurance department and the most  senior
official  of  the governmental unit involved, with respect to any insur-
ance coverages placed for or insurance services rendered to  the  state,
its  agencies  and  departments,  public  benefit  corporations, munici-
palities and other governmental subdivisions in this state.
  S 26. Subsection (b) of section 2132 of the insurance law, as added by
chapter 656 of the laws of 1992, is amended to read as follows:
  (b) This section shall not apply to:
  (1) those persons holding licenses for which  an  examination  is  not
required by the laws of this state; [or]
  (2)  FOR  PURPOSES  OF  A  TITLE  INSURANCE AGENT LICENSE, AN ATTORNEY
LICENSED TO PRACTICE LAW IN THIS STATE; OR
  (3) any limited licensees or any other licensees as the superintendent
may exempt subject  to  any  continuing  education  requirements  deemed
appropriate by the superintendent.
  S  27.  The  insurance  law is amended by adding a new section 2137 to
read as follows:
  S 2137. TITLE INSURANCE BUSINESS ARRANGEMENTS. ANY  PERSON  WHO  HOLDS
ANY  DIRECT OR INDIRECT FINANCIAL OR OTHER BENEFICIAL INTEREST IN, OR IS
UNDER COMMON CONTROL WITH, OR UNDER CONTROL BY, A TITLE INSURANCE  AGENT
OR TITLE INSURANCE CORPORATION SHALL NOT MAKE A REFERRAL OF TITLE INSUR-
ANCE  BUSINESS TO SUCH AGENT OR INSURER UNLESS:  IT DISCLOSES IN WRITING
TO THE PARTY BEING REFERRED:
  (A) THAT THE PERSON HAS A FINANCIAL OR OTHER  BENEFICIAL  INTEREST  IN
THE TITLE INSURANCE AGENT OR TITLE INSURANCE CORPORATION;
  (B)  AN  ESTIMATE  OF  THE COST OF THE SERVICES OF THE TITLE INSURANCE
AGENT OR TITLE INSURANCE CORPORATION, INCLUDING, WITHOUT LIMITATION, THE
TITLE INSURANCE PREMIUMS, FEES AND OTHER CHARGES;
  (C) THAT THE PARTY BEING REFERRED IS NOT REQUIRED  TO  USE  THE  TITLE
INSURANCE  AGENT  OR  TITLE  INSURANCE CORPORATION TO WHICH THE PARTY IS
BEING REFERRED;
  (D) THAT THE PERSON IS NOT THE SOLE SOURCE OF BUSINESS FOR  THE  TITLE
INSURANCE  AGENT OR THE TITLE INSURANCE CORPORATION AND THE TITLE INSUR-
ANCE AGENT OR TITLE INSURANCE CORPORATION HAS SIGNIFICANT  AND  MULTIPLE
SOURCES OF BUSINESS;
  (E) THAT ANY MONEY OR OTHER THING OF VALUE PAID BY THE TITLE INSURANCE
AGENT  OR  TITLE  INSURANCE  CORPORATION  TO  THE PERSON IS BASED ON THE
PERSON'S FINANCIAL OR OTHER BENEFICIAL INTEREST IN,  OR  COMMON  CONTROL
WITH,  THE  TITLE  INSURANCE AGENT OR TITLE INSURANCE CORPORATION AND IS
NOT RELATED TO THE AMOUNT OF TITLE INSURANCE BUSINESS THE PERSON  REFERS
TO  THE  TITLE  INSURANCE AGENT OR TITLE INSURANCE CORPORATION; AND THAT
THE PAYMENT OF SUCH MONEY OR OTHER  THING  OF  VALUE  DOES  NOT  VIOLATE
SECTION  TWO  THOUSAND  ONE  HUNDRED FIFTEEN, TWO THOUSAND THREE HUNDRED
TWENTY-FOUR OR SIX THOUSAND FOUR HUNDRED NINE OF THIS CHAPTER; AND

A. 7127                             9

  (F) THAT THE PERSON IS NOT REQUIRED TO PRODUCE A SPECIFIED  AMOUNT  OF
TITLE INSURANCE BUSINESS.
  S 28. Subsection (b) of section 305 of the insurance law is amended to
read as follows:
  (b)  No  insurer,  insurance  agent,  TITLE INSURANCE AGENT, insurance
broker or other person subject to the provisions of this  chapter  whose
conduct,  condition or practices are being investigated, and no officer,
director or employee of any such person, shall be entitled to witness or
mileage fees.
  S 29.  Section 6409 of the insurance law, subsection (c) as  added  by
chapter 955 of the laws of 1984, is amended to read as follows:
  S  6409.  Filing  of  policy  forms;  rates;  classification of risks;
commissions and rebates prohibited. (a) No title insurance policy  shall
be  issued  or  delivered in this state, unless [and until a copy of the
form thereof shall have] IT HAS been filed  with  AND  APPROVED  BY  the
superintendent  [for  his information], IN ACCORDANCE WITH ARTICLE TWEN-
TY-THREE OF THIS CHAPTER.
  (b) [Every title insurance corporation shall file with the superinten-
dent its rate manual, if any, its basic schedule of  rates  and  classi-
fication  of  risks,  its  rating  plan and rules in connection with the
writing or issuance of policies of title insurance and shall  thereafter
likewise  file any changes therein. After any such filing no such corpo-
ration shall, in connection with the writing or  issuance  of  any  such
policy,  deviate from the rates, classifications of risks and rules last
filed by it, either by making any  reduction  in  rates  without  having
filed  the  same as herein provided, or by way of any discriminations in
favor of or against any  insured.  The  superintendent  shall  have  the
powers  specified  in article twenty-three of this chapter applicable to
title insurers.] TITLE INSURANCE RATES AND RATE FILINGS SHALL BE SUBJECT
TO ARTICLE TWENTY-THREE OF THIS CHAPTER.
  (c) Notwithstanding any other provision of this article,  every  title
insurance  [company] CORPORATION shall be required to offer, at or prior
to title closing, an optional policy form which will insure the title of
owner-occupied real property used predominantly for residential purposes
which consists of not more than four dwelling units for an amount  equal
to  the  market  value of the property at the time a loss is discovered.
Such policy form shall be filed with, AND APPROVED BY,  the  superinten-
dent pursuant to subsection (a) of this section. Rates for such coverage
shall be filed AND APPROVED pursuant to subsection (b) of this section.
  (d)  No  title insurance corporation, TITLE AGENT, or any other person
acting for or on behalf of [it] THE TITLE INSURANCE CORPORATION OR TITLE
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 appli-
cant  for  insurance,  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  FOR  INSURANCE, OR ANY
PERSON, FIRM, OR CORPORATION ACTING AS AGENT, REPRESENTATIVE,  ATTORNEY,
OR  EMPLOYEE  OF  THE OWNER, LESSEE, MORTGAGEE OR 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  [accepts  or  receives  such  a commission or rebate] VIOLATES THIS

A. 7127                            10

SECTION shall be subject to a penalty equal to the greater of [one] FIVE
thousand dollars or five times the amount thereof.
  (e)  Premium  rates  for  coverage  shall  fully reflect the foregoing
prohibitions of subsection (d) hereof.
  S 30.  The superintendent of insurance  shall  promulgate  application
forms for persons, firms and corporations seeking to obtain a license as
a title insurance agent.
  S  31.  Each  person, firm or corporation who has filed an application
for a license as a title insurance agent on or before January  1,  2010,
or  within 90 days after the superintendent of insurance has promulgated
application forms pursuant to this act, whichever date is later, may act
as such an agent without a license issued pursuant to  section  2103  of
the insurance law until the superintendent of insurance has made a final
determination  on the application for such license filed by such person,
firm or corporation.
  S 32. This act shall take effect on  the  one  hundred  twentieth  day
after  it shall have become a law, provided that the amendments to para-
graph 1 of subdivision (a) of section 2115 of the insurance law made  by
section twenty of this act shall be subject to the expiration and rever-
sion of such paragraph pursuant to section 12 of chapter 418 of the laws
of 2000, as amended, when upon such date the provisions of section twen-
ty-one  of this act shall take effect; provided, however, that effective
immediately, the addition, amendment and/or repeal of any rule or  regu-
lation  necessary  for  the  implementation of this act on its effective
date are authorized and directed to be made and completed on  or  before
such effective date.