381.029. Affiliated business--definitions--requirements--rules--violations.

MISSOURI STATUTES AND CODES

381.029. Affiliated business--definitions--requirements--rules--violations.

Affiliated business--definitions--requirements--rules--violations.

381.029. 1. As used in this section, the following terms mean:

(1) "Affiliate", a specific person that directly or indirectlythrough one or more intermediaries controls, or is controlled by, or isunder common control with, the person specified;

(2) "Affiliated business", any portion of a title insurance agency'sbusiness written in this state that was referred to it by a producer oftitle insurance business or by an associate of the producer, where theproducer or associate, or both, have a financial interest in the titleagency;

(3) "Associate", any:

(a) Business organized for profit in which a producer of titlebusiness is a director, officer, partner, employee, or an owner of afinancial interest;

(b) Employee of a producer of title business;

(d) Spouse, parent, or child of a producer of title insurancebusiness who is a natural person;

(e) Person, other than a natural person, that controls, is controlledby, or is under common control with, a producer of title business;

(f) Person with whom a producer of title insurance business or anyassociate of the producer has an agreement, arrangement, or understanding,or pursues a course of conduct, the purpose or effect of which is toprovide financial benefits to that producer or associate for the referralof business;

(4) "Control", including the terms "controlling", "controlled by",and "under common control with", the possession, direct or indirect, of thepower to direct or cause the direction of the management and policies of aperson, whether through the ownership of voting securities, by contractother than a commercial contract for goods or nonmanagement services, orotherwise, unless the power is the result of an official position orcorporate office held by the person. Control shall be presumed to exist ifa person, directly or indirectly, owns, holds with the power to vote, orholds proxies representing ten percent or more of the voting securities ofanother person. This presumption may be rebutted by showing that controldoes not exist in fact. The director may determine, after furnishing allpersons in interest notice and opportunity to be heard and making specificfindings of fact to support the determination, that control exists in fact,notwithstanding the absence of a presumption to that effect;

(5) "Referral", the directing or the exercising of any power orinfluence over the direction of title insurance business, whether or notthe consent or approval of any other person is sought or obtained withrespect to the referral.

2. Whenever the business to be written constitutes affiliatedbusiness, prior to commencing the transaction, the title insurer, titleagency, or title agent shall ensure that its customer has been providedwith disclosure of the existence of the affiliated business arrangement anda written estimate of the charge or range of charges generally made for thetitle services provided by the title insurer, title agency, or agent.

3. The director shall establish rules for use by all title agenciesin the recording and reporting of the agency's owners and of the agency'sownership interests in other persons or businesses and of materialtransactions between the parties.

4. The director shall require each title insurer, agency, and agentto file on forms prescribed by the director reports setting forth the namesand addresses of those persons, if any, that have a financial interest inthe insurer, agency, or agent and who the insurer, agency, or agent knowsor has reason to believe are producers of title insurance business orassociates of producers, except the duty to report shall not includeshareholders of record of any publicly traded insurer.

5. Nothing in this chapter shall be construed as prohibitingaffiliated business arrangements in the provision of title insurancebusiness so long as:

(1) The title insurer, title agency, title agent, or party making areferral constituting affiliated business, at or prior to the time of thereferral, discloses the arrangement and, in connection with the referral,provides the person being referred with a written estimate of the charge orrange of charges likely to be assessed and otherwise complies with thedisclosure obligations of this section;

(2) The person being referred is not required to use a specifiedtitle insurer, agency, or agent; and

(3) The only thing of value that is received by the title insurer,agency, agent, or party making the referral, other than payments otherwisepermitted, is a return on an ownership interest. For purposes of thissubsection, the terms "required use" and "return on an ownership interest"shall have the meaning accorded to them under the Real Estate SettlementProcedures Act (RESPA), as amended.

6. A violation of any provision under this section is a level twoviolation under section 374.049, RSMo.