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Bulletin: NY000634

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Bulletin: NY000634

Bulletin Document
V 1
Date: January 06, 2020
To: All New York State Agents, Office Counsel, and Managers
RE: Update: NY Insurance Regulation 208/Article 78 Petition Appeal

*This Bulletin serves as an update to Bulletins NY000632; 621 & 620*

Last week, Stewart Title issued Bulletin No. NY000632 regarding the recent Appellate Division decision on the appeal of the Supreme Court order annulling Regulation 208.  On December 26, 2019, the Appellate Division has again unanimously reversed the Supreme Court’s decision annulling Regulation 208.  

The purpose of this Bulletin is to clarify our prior Bulletins regarding the effects the Appellate Division decision has on the limitations on ancillary charges under Section 228.5, entitled Ancillary or other discretionary fees.  Certain ancillary or other discretionary fees previously annulled by the January 15, 2019 decision continue to be annulled. The fees caps on bankruptcy, patriot and municipal searches (not conducted and billed by a municipality) continue to be annulled. (Section 228.5 (a) (1), (2) and (3) of Regulation 208).

Although the DFS has advised in Circular Letter No. 2a (2019), Title Insurance Corporations, and Title Insurance Agents, are not required to comply with the provisions of 228.5. The Title Association sought clarification from the courts and the court advised that only 228.5 (a) (1), (2) and (3) of Regulation 208 were annulled.  Stewart is seeking clarification of this insurance guidance. Until we advise of clarification from the DFS, the question concerning title closers remains annulled: Both in-house and independent closers are able to collect pick-up fees.  Pick-up fees are permitted on all transactions. Closers are able to receive compensation directly from the applicant or their representative for services rendered.  (Section 228.5 (d) 1 and (d) 2 continue to be annulled).

Further, pending DFS guidance: For residential property, the following caps on ancillary fees caps are in effect: Overnight (actual out of pocket), Survey inspection (cost + $75), Escrows ($50 per escrow), Recordings (cost + $25 per instrument). Only the provisions regarding bankruptcy searches, patriot searches and municipal or departmental searches not conducted by the municipality (228.5a (1)(2) and (3) of Regulation 208) were annulled.

The remainder of Section 228.5 remains in effect at this time.

In the event you have any questions regarding the above please contact Stewart Title Legal Department at 212-922-0050 and speak with any Underwriting Counsel.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

 

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.

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