Home > Blogs > Scott Hoen > Title Tech Talk with Scott Hoen

California Title Marketing Rep Licensing Law to be effective January 1, 2009

By Scott Hoen

Title Insurance ePro, MBA

September 24, 2008 10:30 AM

SB133 in California was approved by the Senate on August 21 and by the Assembly on August 13.

Under the provisions of SB133, title insurance sales representatives would register with the California Department of Insurance. These sales resp would be subject to suspension by the department in the even they participated in prohibited activities. In addition, SB133 requires that the department provide clarity through the regulatory process regarding marketing expenditures and activities.

The new law will establish procedures for obtaining and renewing a certificate of registration as a title marketing representative, as specified; prohibits a person from marketing, offering, soliciting, negotiating, or selling title insurance in California without a valid certificate of registration as a title marketing representative.

The law places STRICT limits on the value of items that title marketing representatives are allowed to provide to those in a position to refer business to the title insurers they represent.

Currently, the legislation DOES NOT allow for any expenditures for food, beverages, entertainment, educational programs and promotional items, as specified, and would instead do the following, with respect to those who solicit title insurance business:

a) Prohibit advertising or paying for the advertising in any newspaper, newsletter, magazine, or publication that is produced by, or on behalf of a person, or that results in a direct or indirect subsidy to a person.

b) Prohibit expenditures for food, beverages, and entertainment for a person

c) Allow expenditures for promotional items with a permanently affixed company logo of the underwritten title company, title insurer, or controlled escrow company, and with a value of not more than $10 each, but provide that promotional items do not include gift certificates, gift cards, or other items with a specific monetary value on their face or items that may be exchanged for other items having a specific monetary value

d) Allow the furnishing of education and educational materials exclusively related to the business of title insurance for a person, if continuing education credits are not provided.

e) allow other expenditures for a person, as permitted by DOI, by regulation.

If the Govenor signs before October 1st -- this legislation will go into effect January 1st, 2009

IMPACT for real estate professionals -- Title Insurance Marketing and Sales Representatives can NO LONGER provide food for meetings, buy you a cup of coffee or lunch or any other form of inducement to do business in the State of California. Customer Service, Farms and On-line Property Profiles will continue to be provided and not affected by this legislation.

Re-Blog

Comments(10)

Comment

Show All Comments

Sort:

Scott Mazza

Stewart Title of California - Ventura, CA

Hey Scott, I heard that this was going to happen and it was on the table. So I guess it passed. The reps that are paying for marketing and other things are the ones who should be concerned because the D.O.I. can look in to your personal checking and so forth to keep an eye on you. It's all good for me since I have chosen to stay away from that kind of game. It has made it a uphill battle to compete with other reps that do that but at least I am clean. Have a great day Scott.

Sep 25, 2008 01:25 AM

Scott Hoen

Carson City, NV

Carson City Clerk Recorder / Public Administrator

One of the biggest violations that Title Representatives are pressed for is to discount the price of the title insurance policy. Real Estate Professionals from Brokers, Agents, Lenders and Escrows should realize that this is illegal and a violation. Title Insurance Companies are regulated by the Department of Insurance and MUST charge the posted rate.

Don't always recommend to your client to go with the lowest rate -- make sure you select a Title Insurance Company or underwriter with a sound financial position -- Many have and are going to have financial difficulty and you want to make sure that your Title Company exists if the consumer ever needs to place a claim in the future.

Sep 25, 2008 06:01 PM

Charlie Holloway

Equity Land Title - O'Fallon, MO

Sounds like the reps that actually know the business are finally going to come out on top. In Missouri the reps that don't understand the business are the reps that take the clients to lunch buy them coffee and so forth. They should pass this in MO as well. Good for CA for getting the ball rolling.

In another sense looks like CA finally filled in the grey areas of RESPA and made it a little more black and white.

Sep 26, 2008 03:32 AM

John Bethell

John Bethell Title Company, Inc. - Bloomington, IN

Scott, I'm new here and thank you for what I've learned from your past posts. Not to be a wet blanket but I wouldn't hold my breath that this regulation will be effective. Some Reps will always be weaseling th system. My personal experience is that this sort of thing only penalizes those of us who play by the rules. If the DOI is sufficiently staffed to investigate abuse AND there are corresponding penalties for ACCEPTING gifts, it might work. Too many states put the burden of proof on the complaining party rather than investigating the situation and there are no penalties for accepting gifts. Its terribly hard catch someone in that environment. The best regulation California has is the large amount of capital required to be in the title business. That tends to keep the riff raff to a minimun.

Sep 26, 2008 11:09 PM

Anonymous

M Escutia Title Co. in L.A.

In response to the following quote, "Customer Service, Farms and On-line Property Profiles will continue to be provided and not affected by this legislation."

These type of subscriptions are paid by the title company for the use of the real estate industry. Main purpose is to solicit the client to utilize their company. Public information like this can be obatined through free public websites, or through government information portals.

Dec 22, 2008 10:57 AM

jeff

Question, California title insurance

Can title owned escrow companies LEGALLY pay for upfront HOA demand fee?

I am selling bank REO's & the title owned escrow the bank is using is forcing me to pay for the fee the HOA management companies charge to produce a copy of the HOA docs & financials. The fee ranges from $150 to $250 per set. Independent escrow companies have no problem paying for these. By the way, it's not the money - it's the principle.

When I questioned the escrow manager she used the all encompassing "blame it on SB 133" answer however, could not identify where in the code it says they are forbidden to do so. Personally, I think they are full of baloney.

Do you have an answer?

Apr 18, 2009 02:03 AM

Bill Fletcher

Web Handyman - Dana Point, CA

Hi Scott,

Now that SB133 has been in effect for awhile I am wondering what Title Reps and Realtors think about it? Love it? Hate it? What do you miss most about pre SB133?

Thanks for your input?

www.lightbrightlistings.com

May 30, 2009 10:37 AM

CA Title Companies have nearly eliminated all customer service -- no longer can they provide comparable sales OR ownership documents as part of a property profile -- lender information is gone, tax assessment information is gone -- they can confirm who owns the property and basic property characteristics.

Jul 03, 2009 02:37 AM

Christopher Scott

Well, it looks like the DOI is being DUPED again. I have in my hand, a LENDER FARM with loan info and DQ identification from none other than Orange Coast Title in Long Beach. Naughty, naughty illegal activity.

Mulhearn is at it again as everybody has their price in this world.

How long will it go on before a rep will lose their license?

Mar 02, 2010 04:34 PM

I just saw that two other Title Companies got fined for even rate issues. Title Companies can not deviate from posted rates with the State Department of Insurance. Not only will the Title Representative lose their license but agents are starting to be implicated.

Mar 02, 2010 10:17 PM

Comments(10)

Scott Hoen

Real Estate Resources