Wednesday, October 22, 2008

SB 133 - Has Regulating the Marketing of Title Insurance gone too far?

Though officially, SB 133 does not take effect until January 1, 2009, locally title companies are implementing its new standards now. Title company "Business Development" (sales) representatives will have to be licensed with the department of insurance. While there have been pre-existing rules in effect regarding "inducements" (kickbacks, gifts, etc. in exchance for doing business), this bill takes everything to a new level.

While I definitely agree with the concept of the legislation, the practice and everyday implications of this legislation seem never-ending and, quite frankly - pretty scary.

Now title reps can not participate in any Sacramento Association of Realtors committees (example - the title rep that serves on the Young Professionals Council must resign her position at the end of the year). Title companies can not sponsor any SAR or real estate office events or fundraisers (example - sponsor a booth at an annual conference). A title rep can not bring food or drink to a SAR or real estate office meeting or party (example - can not provide a pot of coffee at a regional meeting). If a title rep and a real estate agent happen to be friends, the title rep can not buy the agent a birthday present...can not validate parking...can not make copies at an escrow far does this really go?

If a title rep is caught violating any rules, they can be subject to personal fines, and have their license revoked (they can not reapply for 5 years).

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