The existing rule is amended to conform with statute regarding unfair methods of competition and deceptive practices in the transaction of title insurance. The proposed rule clarifies that, except as otherwise permitted under paragraph 626.9541(1)(h)...

 

DEPARTMENT OF FINANCIAL SERVICES

Division of Insurance Agent and Agency Services

RULE NO.:    RULE TITLE:

69B-186.010 Unlawful Inducements Related to Title Insurance Transactions

PURPOSE AND EFFECT: The existing rule is amended to conform with statute regarding unfair methods of competition and deceptive practices in the transaction of title insurance. The proposed rule clarifies that, except as otherwise permitted under paragraph 626.9541(1)(h), F.S., the reimbursement or reduction of any premium, costs, or fees in a contract for the placement of title insurance, or the provision of any non-specified benefit or valuable consideration that also serves as an inducement in the placement of title insurance, is an unlawful rebate. The proposed rule also revises the existing rule’s title to reflect the changes discussed above. The proposed rule is renumbered and includes additional technical changes.

SUMMARY: The existing rule is amended to conform with paragraph 626.9541(1)(h), F.S., clarifying that the reimbursement of any premium, fees, or costs relating to title insurance transactions, or the provision of any non-specified valuable consideration or benefit that also serves as an inducement in the placement of title insurance, is an unlawful rebate.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: The Department has conducted an economic analysis of the proposed rule and has determined that there are no adverse impacts or potential regulatory costs exceeding criteria established under paragraphs 120.541(1)(b) or (2)(a), F.S.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 624.308(1), 626.9611, FS.

LAW IMPLEMENTED: 626.9521, 626.9541(1)(h), (m), FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW (IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):

DATE AND TIME: Wednesday, April 26, 2017; 10:00 A.M. - 12:00 P.M.

PLACE: Room 116, Larson Building, 200 East Gaines Street, Tallahassee, Florida.

Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 5 days before the workshop/meeting by contacting: Matthew Guy, telephone: [phone], email: [e-mail].. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Matthew Guy, Government Analyst II, Bureau of Investigation, Division of Insurance Agent and Agency Services, Department of Financial Services, address: 200 East Gaines Street, Tallahassee, Florida 32399-0320, telephone: [phone], email: [e-mail].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

69B-186.010 Unlawful Rebates as Inducements Related to Title Insurance Transactions.

(1) The purpose of this rule is to interpret paragraph 626.9541(1)(h) subparagraph 626.9541(1)(h)3., F.S., which provides that it is an unfair method of competition and unfair or deceptive act or practice prohibited by Section 626.9521, F.S., to engage in certain activities related to title insurance.

(2) No change.

(3) For purposes of this rule: , the term “referrer of settlement service business” means any person who is in a position to refer title insurance business incident to or part of a real estate transaction, or an associate of such person. A referrer of settlement service business may be a title insurance agent, title insurance agency, title insurance company, attorney, real estate broker, real estate agent, real estate licensee, broker associate, sales associate, mortgage banker, mortgage broker, lender, real estate developer, builder, property appraiser, surveyor, escrow agent, closing agent, or any other person or entity involved in a real estate transaction for which title insurance could be issued; or any employee, officer, director, or representative of such a person or entity.

(a) An unlawful rebate includes any discount, abatement, credit, or reduction of premium or fees specified by contract in the placement of a policy of title insurance, as well as any other non-specified valuable consideration or benefit that also serves as an inducement in the placement of a such a policy, as provided under paragraph 626.9541(1)(h), F.S., and

(b) The term “referrer of settlement service business” means any person who is in a position to refer title insurance business incident to or part of a real estate transaction, or an associate of such person. A referrer of settlement service business may be a title insurance agent, title insurance agency, title insurance company, attorney, real estate broker, real estate agent, real estate licensee, broker associate, sales associate, mortgage banker, mortgage broker, lender, real estate developer, builder, property appraiser, surveyor, escrow agent, closing agent, or any other person or entity involved in a real estate transaction for which title insurance could be issued; or any employee, officer, director, or representative of such a person or entity.

(4) As they relate to the transaction of title insurance, the following activities, whether performed directly or indirectly, for or by any referrer of settlement service business, are rebates that serve as inducements for the sale, placement or referral of title insurance business in violation of Section 626.9521 and paragraph 626.9541(1)(h) subparagraph 626.9541(1)(h)3., F.S.:

(a) Facilitating any discount, reduction, credit, or paying any fee or portion of the cost of an inspection, inspection report, appraisal, or survey, including wind inspection, to or for a purchaser or prospective purchaser of title insurance.

(b) through (r) No change.

(5) Except as prohibited by Section 626.9541, F.S., expenditures for the following are not in violation of Section 626.9521 and paragraph 626.9541(1)(h) subparagraph 626.9541(1)(h)3., F.S., or in violation of this rule:

(a) through (f) No change.

Rulemaking Authority 624.308(1), 626.9611 FS. Law Implemented 626.9521, 626.9541(1)(h), (m), FS. History–New 2-9-16, Amended___________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Matthew Guy, Government Analyst II, Bureau of Investigation, Division of Insurance Agent and Agency Services, Department of Financial Services

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Jeff Atwater, Chief Financial Officer, Department of Financial Services

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: February 16, 2017

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: February 22, 2016