- May 30, 1995
- All New York Offices, Counsel, Managers and Agents
- Coop Searches Performed by a Title Agent Guaranteeing the Accuracy of Correctness of a Judgment and Lien Search Constitutes Doing the Business of Title Insurance
Pursuant to an inquiry from the Title Insurance Rate Service Association (TIRSA), the Insurance Department of the State of New York was asked to determine whether a title agent, which provides a financial certification or guarantee as to the correctness of its search for liens and judgments involving a coop apartment, and which agent charges a fee based on the amount of liability assumed, is conducting a title insurance business which requires such agent to be licensed as a title insurer.
The Department has answered the question in the affirmative. In addition to citing several sections of the Insurance Law as authority for its position, the Department referenced an opinion of the Attorney General (Op.A.G. F83-3) which, in part, provided that:
"insuring and guaranteeing the correctness of title searches is a form of title insurance and is specifically recognized under the Insurance Law as constituting the doing of an insurance business. Any person or firm engaged in the business of guaranteeing the correctness of title searches is, therefore, 'doing an insurance business' and is subject to the licensing requirements of the Insurance Law."
As a result of the position taken by the Department of Insurance on this subject, title agents are not permitted to issue such a guaranteed search. All agents of Stewart Title Insurance Company are hereby advised to comply with this determination effective immediately.
All sales and underwriting personnel should be aware that the New York Title Insurance Rate Manual does provide title insurance coverage for owners and lenders in the form of a cooperative leasehold policy with a cooperative endorsement. In the event that you receive a request for title coverage on a coop unit purchase or loan, the client should be informed of the coverage available under the Rate Manual.
If you have any questions, in this regard, please contact Company Counsel
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.
- Bulletins Replaced:
- Related Bulletins:
- Underwriting Manual:
- 3.64 Cooperative Ownership
- Exceptions Manual: