Rhode Island General Laws 27-2.6-11. Diversification requirement
(a) Without the prior written approval of the commissioner, a domestic title insurer shall not accept:
(1) Additional business from a title insurance agent that is not an affiliated company with the insurer if, when added to other business written through the title insurance agent during the same calendar year, that agent’s aggregate premiums written on behalf of the title insurer will exceed twenty percent (20%) of the title insurer’s gross premiums written during the prior calendar year, as shown on the title insurer’s most recent annual statement on file with the commissioner; or
(2) Additional direct operations business from a single source if, when added to other direct operations business from the single source during the same calendar year, the aggregate premiums written on the direct operations business of the single source will exceed twenty percent (20%) of the title insurer’s gross premiums written during the prior calendar year as shown on the title insurers most recent annual statement on file with the commissioner. For purposes of this section a “single source” means a person that refers business to the title insurer and any other person that controls, is controlled by, or is under common control with, that person.
Terms Used In Rhode Island General Laws 27-2.6-11
- agent: means an authorized person, other than a bona fide employee of the title insurer who, on behalf of the title insurer, performs the following acts, in conjunction with the issuance of a title insurance report or policy:
(i) Determines insurability and issues title insurance reports or policies, or both, based upon the performance or review of a search or abstract of title; and
(ii) Performs one or more of the following functions:
(A) Collects or disburses premiums, escrow or security deposits or other funds;
(B) Handles escrows, settlements or closings;
(C) Solicits or negotiates title insurance business; or
(D) Records closing documents. See Rhode Island General Laws 27-2.6-3
- Commissioner: means the director of the department of business regulation, or his or her designee or the commissioner, director or superintendent of insurance in any other state. See Rhode Island General Laws 27-2.6-3
- Direct operations: means that portion of a title insurer's operations which are attributable to business written by a bona fide employee. See Rhode Island General Laws 27-2.6-3
- insurer: means a company organized under laws of this state for the purpose of transacting the business of title insurance and any foreign or non-United States title insurer licensed in this state to transact the business of title insurance. See Rhode Island General Laws 27-2.6-3
- Oversight: Committee review of the activities of a Federal agency or program.
- Person: means any natural person, partnership, association, cooperative, corporation, trust or other legal entity. See Rhode Island General Laws 27-2.6-3
(b) In determining whether prior approval may be given, the commissioner shall consider:
(1) The potential that the acceptance of more business from the title agent or source may adversely affect the financial solvency of the title insurer;
(2) The availability of competing title agents or additional sources in the territories in which the title insurer accepts risks;
(3) The number of years the title insurer has been in business;
(4) Reinsurance arrangements mitigating the concentration of business from the agent or source;
(5) The comparative profitability of the agent’s or source’s book of business;
(6) The degree of oversight of the agent’s operations exercised by the title insurer; and
(7) Any other circumstances deemed by the commissioner to be appropriate.
History of Section.
P.L. 2010, ch. 58, § 1; P.L. 2010, ch. 66, § 1.