SENATE, No. 2229

STATE OF NEW JERSEY

212th LEGISLATURE

INTRODUCED OCTOBER 12, 2006

 


 

Sponsored by:

Senator RAYMOND J. LESNIAK

District 20 (Union)

 

 

 

 

SYNOPSIS

†††† Permits title insurance companies and agents to offer certain inducements in connection with the business of title insurance.

 

CURRENT VERSION OF TEXT

†††† As introduced.

††


An Act concerning the use of inducements in connection with the business of title insurance and amending P.L.1944, c.27 and P.L.1975, c.106.

 

†††† Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

†††† 1.† Section 15 of P.L.1944, c.27 (C.17:29A-15) is amended to read as follows:

†††† 15.† No insurer or employee thereof, and no broker or agent shall knowingly charge, demand or receive a premium for any policy of insurance except in accordance with the respective rating-systems on file with and approved by the commissioner [or, as required by the commissioner, to be used on an interim basis in accordance with subsection e. of section 14 of P.L.1944, c.27 (C.17:29A-14)].† No insurer or employee thereof, and no broker or agent shall pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, as an inducement to insurance, or after insurance has been effected, any rebate, discount, abatement, credit, or reduction of the premium named in a policy of insurance, or any special favor or advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever, not specified in the policy of insurance, except to the extent that such rebate, discount, abatement, credit, reduction, favor, advantage or consideration may be provided for in rating-systems filed by or on behalf of such insurer and approved by the commissioner , or to the extent permitted by a title insurance company or title insurance agent, without the need for prior approval of the commissioner, pursuant to section 35 of P.L.1975, c.106 (C.17:46B-35) .† No insured named in a policy of insurance, nor any employee of such insured, shall knowingly receive or accept, directly or indirectly, any such rebate, discount, abatement, or reduction of premium, or any such special favor or advantage or valuable consideration or inducement , except for those provided for in rating-systems approved by the commissioner, or those presented or offered by a title insurance company or title insurance agent, without the need for prior approval of the commissioner, pursuant to section 35 of P.L.1975, c.106 (C.17:46B-35) . Nothing herein contained shall be construed as prohibiting the payment of commissions or other compensation to regularly appointed and licensed agents and to brokers duly licensed by this State, nor as prohibiting a discount, abatement, or reduction in premium on policies issued to or on behalf of the State of New Jersey.

(cf: †P.L.1984, c.40, s.6)

†††† 2.† Section 34 of P.L.1975, c.106 (C.17:46B-34) is amended to read as follows:

†††† 34.† Commissions; no right to pay.† No title insurance company and no title insurance agent shall pay, allow or give, or offer to pay, allow or give, directly or indirectly, any commission or part of its fee or charge or any other consideration as an inducement or compensation for the placing or procuring of any order for title insurance; provided, however, that nothing herein contained shall be construed to prohibit the payment of a commission or other compensation to a regular full-time employee of a title insurance company or agent of a title insurance company as part of the regular compensation of such employee or agent , or prohibit the use of inducements as permitted by section 35 of P.L.1975, c.106 (C.17:46B-35) .

(cf: †P.L.1975, c.106, s.34)

 

†††† 3.† Section 35 of P.L.1975, c.106 (C.17:46B-35) is amended to read as follows:

†††† 35.† Rebates or reduced fees.† a.† No title insurance company and no title insurance agent shall pay, allow or give, or offer to pay, allow or give, directly or indirectly, as an inducement to insure, or after insurance has been affected, any rebate, discount, abatement, credit or reduction of premium or special favor, advantage, or other benefit to accrue thereon or any valuable consideration or inducement whatever, not specified or provided for in the policy, except:

†††† (1) †to the extent provided for in an applicable filing with the commissioner as provided by this act ; or

†††† (2)† if presented or offered to a person:

†††† (a) who is, or will be, the purchaser of a contract or policy of title insurance;

†††† (b) the presentment or offer is an optional condition in connection with any real property or interest therein which is, or will be, the subject matter of the contract or policy of title insurance;

†††† (c) †the person is not required to use the presenting or offering title insurance company or title insurance agent in connection with any real property or interest therein which is, or will be, the subject matter of the contract or policy of title insurance; and

†††† (d) †any reduction in costs or other savings for the person, or any increase in costs for the presenting or offering title insurance company or title insurance agent, resulting from the personís acceptance of any inducement will not be added, by the title insurance company or title insurance agent, or any other party directly or indirectly involved in the presenting or offering of the inducement, to any of the personís other costs associated with any real property or interest therein which is, or will be, the subject matter of the contract or policy of title insurance.

†††† b.† No title insurance company and no title insurance agent shall quote any fee or make any charge to any person which is less than that currently available to others in a like amount and involving the same factors as set forth in the schedule of fees and charges established pursuant to section 41 of† this act, or otherwise make or permit any unfair discrimination in the premium or rates charged for insurance or in other fees and charges or in other benefits, or in any other of the terms and conditions of the insurance policy,† except to the extent provided for in an applicable filing with the commissioner as provided by this act , or to the extent permitted, without the need for prior approval of the commissioner, pursuant to the provisions of paragraph (2) of subsection a. of this section.† The amount by which any fee or charge , other than a fee or charge related to the use of inducements as permitted pursuant to paragraph (2) of subsection a. of this section, is less than that prescribed by the schedule of fees and charges established pursuant to section 41 of this act is an unlawful rebate.

†††† c.† No applicant for insurance, nor any insured, nor any owner, lessee, mortgagee, existing or prospective, of the real property or interest therein which is the subject matter of the application for insurance, nor any person acting as agent, representative, attorney, broker or employee of such applicant, insured, or such owner, lessee or mortgagee, shall knowingly receive or accept, directly or indirectly, any commission, rebate, discount, abatement, credit or reduction of premium, or any special favor or advantage or valuable† consideration or inducement prohibited by this act.

(cf:† P.L.1975, c.106, s.35)

 

†††† 4. †This act shall take effect on the first day of the fourth month next following the date of enactment.

 

 

STATEMENT

 

†††† This bill permits title insurance companies and title insurance agents to offer certain inducements in connection with performing the business of title insurance.† A title insurance company or title insurance agent may, without prior approval of the Commissioner of Banking and Insurance, present or offer a rebate, discount, abatement, credit or reduction of premium, or other benefit or inducement in connection with a contract of title insurance, so long as:

†††† (1) †it is only presented or offered to a person who is, or will be, the purchaser of that contract or policy of title insurance;

†††† (2) the presentment or offer is an optional condition in connection with any real property or interest therein which is, or will be, the subject matter of the contract or policy;

†††† (3) †the person is not required to use the presenting or offering title insurance company or title insurance agent in connection with any real property or interest therein which is, or will be, the subject matter of the contract or policy of title insurance; and

†††† (4) †any reduction in costs or other savings for the person, or any increase in costs for the presenting or offering title insurance company or title insurance agent, resulting from the personís acceptance of any inducement will not be added, by the title insurance company or title insurance agent, or any other party directly or indirectly involved in the presenting or offering of the inducement, to any of the personís other costs associated with any real property or interest therein which is, or will be, the subject matter of the contract or policy of title insurance.