DAR File No. 30080

Insurance, Administration

R590-153-6

Permitted Advertising and Business Entertainment

NOTICE OF PROPOSED RULE

DAR File No.: 30080
Filed: 06/13/2007, 12:20
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

Changes to this rule are being made to keep up with inflation.

Summary of the rule or change:

Some of the dollar amounts that title producers are allowed to expend for advertising and entertainment have been increased to keep up with inflation in Subsections R590-153-6(D), (E), (F)(3), (G)(3) and (H).

State statutory or constitutional authorization for this rule:

Sections 31A-2-201 and 31A-23a-402

Anticipated cost or savings to:

the state budget:

This rule will create no change in the state or department revenues or budget, nor the department's workload. Insurers will not be required to file additional forms or rates and department fees will not be changed as a result.

local governments:

This rule deals only with the relationship between the department and its licensees and as a result should have no impact on local governments.

other persons:

The increase in the advertising and entertainment amounts are optional. Producers can still spend less. These amounts have not been changed in at least seven years. Those agencies and producers who go with the higher dollar amounts will either need to take the additional expense from their earnings or increase rates to their consumers.

Compliance costs for affected persons:

The increase in the advertising and entertainment amounts are optional. Producers can still spend less. These amounts have not been changed in at least seven years. Those agencies and producers who go with the higher dollar amounts will either need to take the additional expense from their earnings or increase rates to their consumers.

Comments by the department head on the fiscal impact the rule may have on businesses:

The increase in advertising and entertainment expenses for title agencies and producers is not mandatory. The impact of these changes will depend on whether or not the licensee adopts the increases and to what extent. It is not a major change and is meant to keep up with inflation so licensees can maintain the same entertainment and advertising standards as in the past. D. Kent Michie, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Administration
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY UT 84114-1201

Direct questions regarding this rule to:

Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at jwhitby@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

07/31/2007

This rule may become effective on:

08/07/2007

Authorized by:

Jilene Whitby, Information Specialist

R590. Insurance, Administration.

R590-153. Unfair Inducements and Marketing Practices in Obtaining Title Insurance Business.

R590-153-6. Permitted Advertising and Business Entertainment.

A. A title insurer, agency or producer may furnish the following without charge, and without additions, addenda or attachments which may be construed as reaching conclusions of the insurer, agency or producer regarding matters of marketable ownership or encumbrances:

(1) A copy of an existing plat map; or

(2) Tax information covering a specific parcel of real estate, for example, tax identification number, assessed owner, assessed value of land and improvements, or the latest tax amount; or

(3) other information regarding real property which the county recorder's office provides to the public free of charge, or at a nominal charge, and in the exact format and content as provided by the county recorder's office.

B. Advertisements by title insurers, agencies or producers must comply with the following:

(1) The advertisement must be purely self-promotional.

(2) Advertisements may not be placed in a publication, including an Internet web page and its links, that is hosted, published, produced for, distributed by or on behalf of a client except as allowed under R590-153-6 (B)(3).

(3) Advertisements in official trade association publications are permissible as long as any title insurer, agency or producer has an equal opportunity to advertise in the publication and at the standard rates other advertisers in the publication are charged.

C. A title, insurer, agency or producer may donate time to serve on a trade association committee and may also serve as an officer for the trade association.

D. A title insurer, agency or producer may have two self-promotional open houses per calendar year for each of its owned or occupied facilities, including branch offices. The title insurer, agency or producer may not expend more than [$10]$15 per guest per open house. The open house may take place on or off the title insurer's, agency's or producer's premises but may not take place on the client's premises.

E. A title insurer, agency or producer may distribute self-promotional items having a value of [$3]$5 or less to clients, consumers and members of the general public. These self-promotional items shall be novelty gifts which are non-edible and may not be personalized or bear the name of the donee. Self-promotional items may only be distributed in the regular course of business. Self-promotional items may not be given to clients or trade associations for redistribution by these entities.

F. A title insurer, agency or producer may make expenditures for business meals or business activities on behalf of any person, whether a client or not, as a method of advertising, if the expenditure meets all the following criteria:

(1) The person representing the title insurer, agency or producer must be present during the business meal or business activity.

(2) There is a substantial title insurance business discussion directly before, during or after the business meal or business activity.

(3) The total cost of the business meal, the business activity, or both is not more than [$75]$100 per person, per day.

(4) No more than three individuals from an office of a client may be provided a business meal or business activity by a title insurer, agency or producer in a single day.

(5) The entire business meal or business activity may take place on or off the title insurer's, agency's or producer's premises, but may not take place on the client's premises.

G. A title insurer, agency or producer may conduct educational programs under the following conditions:

(1) The educational program shall address only title insurance, escrow or topics directly related thereto.

(2) The educational program must be of at least one hour duration.

(3) For each hour of education [$10]$15 or less per person may be expended, including the cost of meals and refreshments.

(4) No more than one such educational program may be conducted at the office of a client per calendar quarter.

H. A title insurer, agency or producer may acknowledge a wedding, birth or adoption of a child, or funeral of a client or members of his/her immediate family with flowers or gifts not to exceed [$50]$75.

I. Any other advertising and/or business entertainment must be requested in writing and approved in advance and in writing by the commissioner.

 

KEY: title insurance

Date of Enactment or Last Substantive Amendment: [May 13, 2004]2007

Notice of Continuation: November 27, 2002

Authorizing, and Implemented or Interpreted Law: 31A-2-201; 31A-23a-402