CLTA News Express
An Express Article from the California Land Title Association
CLTA's Title Insurance Marketing Law en route to Governor's Desk
Bulletin 08/09-35 - August 26, 2008
Senate Bill 133 (Aanestad), a piece of CLTA-sponsored legislation intended to change the title rebate law, will soon be up for consideration by Governor Schwarzenegger. The bill, which passed out of the Senate late last week, must be acted on by no later than September 30 once it reaches the Governor’s desk.
SB 133 is intended to provide the California Department of Insurance with the statutory authority to create a registration program for title marketing representatives, whom the bill defines as “a natural person who is an employee and whose primary duty is to market, offer, solicit, negotiate or sell title insurance.” In addition, it is also meant to both clarify and significantly limit by statute what may be spent for marketing expenses.
To achieve those ends, SB 133 expands the list of “per se” inducements under Insurance Code to include expenditures for “food, beverages and entertainment,” regardless of the amount, essentially making any such expenditure prohibited. The bill also specifically prohibits advertising for – or paying for the advertising that is produced by or on behalf of – a person, or that results in a direct or indirect subsidy to a person. Only expenditures for promotional items with a permanently affixed title company logo are permitted, and in those cases the value of each item must be $10 or less. Exceptions for education or educational materials are also made, though the items in question must be exclusively related to the business of title insurance, and may not allow for accrual of or be in any way tied to continuing education credits.
In regards to the bill’s licensing requirements, under SB 133 a “title marketing representative” must obtain a valid certificate of registration from the Department of Insurance. Each application for a certificate must contain a statement signed by the company that will employ the title marketing representative, stating that he or she will be provided training in the anti-rebate law within 60 days of the hiring date or date of application. To account for necessary processing time by the Department, a title marketing representative could work on a provisional basis in the interim period while the application is being processed. In the event that a title marketing representative’s employment is terminated, the employer company must notify the Department within 30 days of the termination.
