Bulletin: NY000043

Dear Associates:

If you are:

(a) issuing a loan policy to the mortgagee at the time of a purchase, and

(b) the purchaser or attorney has not ordered an owner's policy,

the Insurance Department requires the title company to give a written notice to the purchaser that the mortgagee's policy does not protect the purchaser, and that borrower can obtain an owner's policy for his/her protection. Section 26 of the TIRSA Rate Manual (effective 9/1/93) requires this notice be on a form approved by the Superintendent of Insurance.

If the borrower elects not to purchase the owner's policy, you must obtain a statement in writing that the notice has been received and that borrower waives the right to purchase an owner's title insurance policy. This must be kept on file for at least five years.

The notice form, available through the reference section at the end of this bulletin, meets the Insurance Department's requirements.

It is recommended that the notice be attached to all title commitments or preliminary certificates of title. In the alternative, you must remain vigilant and provide the notice when the situation is appropriate. Your closers need to be aware of this requirement, and they will need to have a supply of notices on hand in their closer's kit to use in the event the triggering circumstances occur.

If you have any questions on this or any other legal requirement of the TIRSA Rate Manual, please contact Counsel.