Limit Title Insurance Gifts

Section 1. Subsection (d) of section 6409 of the insurance law, as amended by section 17 of part V of chapter 57 of the laws of 2014, is amended to read as follows:

(d) (1) No title insurance corporation, title insurance agent, or any other person acting for or on behalf of the title insurance corporation or title insurance 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 applicant, or to 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 any interest therein, either directly or indirectly, any commission, 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, or any person, firm, or corporation acting as agent, representative, attorney, or employee of the owner, lessee, mortgagee or of 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 violates this section shall be subject to a penalty of [(1)] (i) five thousand dollars; or [(2)] (ii) up to ten times the amount of any compensation or rebate received or paid in the case of a title insurance corporation or title insurance agent; or [(3)] (iii) up to five times the amount of any 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.

LBD06686-02-9

A. 2223--A 2

applicant for title insurance that covers real property used predominantly for residential purposes, and which consists of not more than four dwelling units, other than hotels and motels, an amount not to exceed the compensation or rebate received or paid, when such applicant knew that it was a violation to receive such rebate, or other consideration or valuable thing; provided, however, if such applicant did not know that it was a violation to receive such rebate, or other consideration or valuable thing, he or she shall not be assessed a penalty under this [subdivision] subsection.

(2) Nothing contained in paragraph one of this subsection to the contrary shall prohibit any title insurance corporation or title insurance agent, or any other person acting for or on behalf of the title insurance corporation or title insurance agent, from undertaking any usual and customary marketing activity aimed at acquainting present and prospective customers with the advantages of using a particular title insurer or title insurance agent that are not intended for the purpose of a reward for the future placement of, or the past placement, of a particular piece of title insurance business, including the following expressly permitted activities:

(i) Advertising or marketing in any publication, event or media, at market rates, including sponsorships, advertising gifts, promotional items and consumables;

(ii) Meals and beverages with present or prospective customers where one or more employees or representatives of the title insurance corporation or title insurance agent are present and title insurance business is discussed;

(iii) Continuing legal education course materials or instruction; and

(iv) Charitable contributions in the name of the title insurance corporation or title insurance agent.

Notwithstanding the provisions of this paragraph, no title insurance corporation or title insurance agent, or any other person acting for or on behalf of a title insurance corporation or title insurance agent shall undertake any expenses for providing vacations, trips, travel, gifts, gift cards, gift certificates or other thing of specific monetary value to any present and prospective customers.

§ 2. This act shall take effect immediately.