Montana Code 33-25-401. Prohibited practices — referrals — splitting charges — exemptions
33-25-401. Prohibited practices — referrals — splitting charges — exemptions. (1) Except as provided in subsection (2), a person may not:
Terms Used In Montana Code 33-25-401
- Controlled business: means that portion of the business of title insurance in this state of a title insurer or title insurance producer that is referred to it by a producer or associate having a financial interest in the title insurer or title insurance producer. See Montana Code 33-25-105
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Person: includes a corporation or other entity as well as a natural person. See Montana Code 1-1-201
- producer: means a person, corporation, partnership, or other business entity, including an officer, director, or owner of 5% or more of the equity or capital thereof, engaged in this state in the trade, business, occupation, or profession of:
(a)buying or selling interests in real property;
(b)making loans secured by interests in real property; or
(c)acting as broker, insurance producer, or representative of a person described in subsection (8)(a) or (8)(b). See Montana Code 33-25-105
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Montana Code 1-1-201
- Title insurance business: means :
(a)issuing or offering to issue a title insurance policy as an insurer;
(b)transacting or proposing to transact any of the following as a title insurer or title insurance producer, in contemplation of or in conjunction with the issuance of a title insurance policy:
(i)soliciting or negotiating the issuance of a title insurance policy;
(ii)guaranteeing, warranting, or otherwise insuring the correctness of title searches;
(iii)handling escrows, settlements, or closings;
(iv)executing title insurance policies, reports, commitments, binders, and endorsements;
(v)effecting contracts of reinsurance; or
(vi)abstracting, searching, or examining titles;
(c)transacting, as a title insurer or insurance producer, matters subsequent to the issuance of a title insurance policy and arising out of the policy; or
(d)doing or proposing to do business that, in substance, is equivalent to any of the activities described in subsections (12)(a) through (12)(c) in a manner designed to evade the provisions of this title. See Montana Code 33-25-105
- Title insurance policy: means a contract by which, subject to its stated terms and conditions, a title insurer insures or indemnifies the insured against loss or damage sustained by reason of:
(a)defects in or liens or encumbrances on the title to the stated property;
(b)unmarketability of the title to the stated property; or
(c)invalidity or unenforceability of liens or encumbrances on the stated property. See Montana Code 33-25-105
- Title insurance producer: means a person who holds a valid title insurance producer's license and is authorized in writing by a title insurer to:
(i)solicit title insurance business;
(ii)collect rates;
(iii)determine insurability in accordance with underwriting rules and standards of the insurer; or
(iv)issue policies of the title insurer. See Montana Code 33-25-105
(a)give or accept a fee, rebate, or thing of value pursuant to an agreement or understanding that title insurance business will be referred to a title insurance producer; or
(b)give or accept a portion, split, or percentage of a charge made or received for title insurance business in connection with a transaction involving real property in this state, other than for services actually performed.
(2)(a) A person may pay a return on an investment, based on a percentage of an ownership interest in a title insurance agency, if:
(i)at or prior to the time of a referral, a disclosure of the existence of the arrangement is made to the person being referred and, in connection with the referral, the person is provided a written estimate of the charge or range of charges generally made by the title insurance producer to which the person is referred; and
(ii)the person is not required to use a particular insurance producer.
(b)The following arrangements are not a violation of subsection (2)(a)(ii):
(i)an arrangement that requires a buyer, borrower, or seller to pay for the services of an attorney, credit reporting agency, or real estate appraiser chosen by a lender to represent the lender’s interest in a real estate transaction; or
(ii)an arrangement by which an attorney or law firm represents a client in a real estate transaction and issues or arranges for the issuance of a policy of title insurance in the transaction directly as insurance producer or through a separate corporate title insurance agency that may be established by that attorney or law firm and operated as an adjunct to the attorney’s or firm’s law practice.
(c)Failure to disclose a controlled business relationship is not a violation of subsection (2)(a)(i) if the failure was not intentional and resulted from a bona fide error, proven by a preponderance of the evidence.
(3)This section does not prohibit:
(a)the payment of a fee to an attorney for services actually rendered or by a title insurance producer for services actually performed in the issuance of a title insurance policy; or
(b)payment of a bona fide salary, compensation, or other payment for goods or facilities actually furnished or for services actually performed.