BARRISTER'S BRIEFING: New Regulation Impacts Title Insurance Sector’s Marketing Tools
Leon Cameron, Esq. | April 2018
Insurance Regulation 208, which can be found at 11 NYCRR 228, was made effective on Dec. 18, 2017. This regulation, passed by the New York Department of Financial Services was finalized pursuant to certain consumer complaints regarding the title insurance industry.
Since the regulation became effective, customary marketing and business prospecting tools that many title insurance providers in New York had utilized for years are now prohibited. Section 228.2, “Prohibition on Inducements for Future Title Insurance Business,” speaks to this issue specifically.
Now Prohibited Business and Marketing Activities for Title Insurance Firms:
• Meals and beverages;
• Entertainment, including tickets to shows or sporting events;
• Gifts, including cash or gift cards;
• Outings, such as vacations, golf trips, shopping trips or trips to country clubs;
• Parties and open houses;
• Providing assistance with business expenses of another person;
• Use of premises, unless for a fair rental fee;
• Paying fees or charges of any professional representing an insured in a transaction
• And providing free non-title services.
Still Acceptable Business and Marketing Activities for Title Insurance Firms:
• Political contributions;
• A promotional item or advertising of de minimis value with the company logo on it;
• Charitable contributions
• CLE open to any attorney;
• Periodic title insurance-related events with more than 25 people attending who are all from unaffiliated organizations;
• And marketing events as long as they are open to the general public.
The full text of the regulation may be found at http://www.dfs.ny.gov/insurance/r_finala/2017/rf208txt.pdf. Enforcement proceeds by NYSDFS have already begun.
Editor’s Note: The foregoing is for information purposes only and does not confer an attorney/client relationship. For a legal opinion or advice specific to your situation, please consult with a private attorney at law.