2014 was a year that witnessed significant changes in the way that title insurance agents in New York State would be monitored and, for the first time, licensed by the NYS Department of Financial Services (DFS)!
It also was a year in which title insurance agents needed to prove that they were in compliance with the Seven Pillars of Best Practices established by the American Land Title Association or ALTA.
Hallmark Abstract Service is proud to announce that we have accomplished both tasks and, in fact, are in the process of having our compliance with the ALTA Seven Pillars certified by an outside CPA firm.
What is the title insurance agent licensing requirement and why was it instituted?
In reality New York State is one of the last US states to require that title insurance agents be licensed. At Hallmark Abstract Service we view this as an extremely positive step as it will hold firms to a higher standard and establish a minimum hurdle in terms of knowledge and experience for new agents where none had existed before.
Licensing also requires that a title insurance underwriter affirm that title agents are operating up to their standards, once again setting a barrier to entry for ‘fly-by-night’ firms. Briefly, these are the requirements for licensure straight from Insurance Law Section 2101(y)…
Any authorized or acknowledged agent of a title insurance corporation, and any subagent or other representative of such an agent, who or which for commission, compensation, or any other thing of value, performs the following acts in conjunction with the issuance of a title insurance policy:
1. sells or negotiates the sale of a title insurance policy;
2. evaluates the insurability of title, based upon the performance or review of a title search; and
3. performs one or more of the following functions:
A. collects, remits, or disburses title insurance premiums, escrows or other related funds;
B. prepares, amends, marks up or delivers a title insurance commitment or certificate of title for the purpose of the issuance of a title insurance policy by a title insurance corporation;
C. prepares, amends or delivers a title insurance policy on behalf of a title insurance corporation; or
D. negotiates the clearance of title exceptions, in connection with the issuance of a title insurance policy.
If you would like to check on the licensing status of any title insurance agent in New York State, use this link https://myportal.dfs.ny.gov/nylinxext/elprocesssearch.alice and enter the applicable information.
The output will appear like this…
What are the ALTA Seven Pillars of Best Practices and why were they created?
Title insurance agents have a great responsibility to the consumers we serve!
In addition to ensuring free and clear title to property, title insurance agents must protect clients privacy and non-public information (NPI), ensure that escrow funds are well-managed and secured, that title policy procedures are clearly documented and followed, proper liability insurance is maintained and more.
The ALTA Seven Pillars of Best Practices were developed in conjunction with the banking industry and the Consumer Financial Protection Bureau (CFPB) and are:
- Pillar No 1: Establish and maintain current license(s) as required to conduct the business of title insurance and settlement services.
- Pillar No. 2: Adopt and maintain appropriate written procedures and controls for escrow trust accounts allowing for electronic verification of reconciliation.
- Pillar No. 3: Adopt and maintain a written privacy and information security program to protect Non-Public Personal Information as required by local, state and federal law.
- Pillar No. 4: Adopt standard real estate settlement procedures and policies that help ensure compliance with federal and state consumer financial laws as applicable to the settlement process.
- Pillar No. 5: Adopt and maintain written procedures related to title policy production, delivery, reporting, and premium remittance.
- Pillar No. 6: Maintain appropriate professional liability insurance and fidelity coverage.
- Pillar No. 7: Adopt and maintain written procedures for resolving consumer complaints.
If there are any questions concerning either title agent licensing or the Seven Pillars of Best Practices please don’t hesitate to ask either your Hallmark Abstract Service liaison or, if you prefer, call or email HAS President Michael Haltman at 516.741.4723 or send him an email at firstname.lastname@example.org.
Michael Haltman, President of Hallmark Abstract Service, New York.
HAS is a provider of title insurance in New York State for residential and commercial real estate transactions.
And, for anyone either buying a property or refinancing, remember that although your attorney will likely recommend a title insurance provider you always have the right to choose your own title company (click here to learn more)!
If you have any questions you can reach Michael by email at email@example.com.Google+