Idaho Admin. Code r. 18.05.01.031 - REBATES AND ILLEGAL INDUCEMENTS

01. Items of Value. A title entity will not provide items of value to a producer of title business, consumer or member of the general public except as permitted in Sections 031.02, 031.03, 031.04 and 031.05 of this chapter. If a providing of things of value does not clearly fit into the rules in Sections 031.02, 031.03, 031.04, and 031.05, then it is not allowed. Exhibit 1, located on our website at https://doi.idaho.gov/, is a partial, but not all-inclusive, list of acts and practices that are considered illegal inducements disallowed by Title 41, Idaho Code. (3-31-22)

02. Permitted Consumer Information. To facilitate the listing and sale of Idaho property, certain consumer information may be provided without charge to licensed real estate agents and brokers or to a person who owns the property for which the request is made, but is limited to the following information: (3-31-22)

a. Listing Package is a single copy of a listing package, property profile, or similarly named packet of information and will consist of information relating to the ownership and status of title to real property, and may include a single copy of only the following seven (7) items: (3-31-22)

i. The last deed appearing of record; (3-31-22)

ii. Deeds of trust or mortgages which appear to be in full force and effect; (3-31-22)

iii. A plat map reproduction and/or a locater map; (3-31-22)

iv. A copy of applicable restrictive covenants; (3-31-22)

v. Tax information; (3-31-22)

vi. Property characteristics such as number of rooms, square footage and year built; and (3-31-22)

vii. Photographs, including aerial, of the property. (3-31-22)

b. A listing package may include no more than the seven (7) above described items of information and will not include market value information, demographics, or additions, addenda, or attachments which may be construed as conclusions reached by the title entity regarding matters of marketable ownership or encumbrances. Photographs may be provided, but only if the title entity does not pay a separate fee or provide any other consideration to a person for that product or service. The title entity may provide any photographs that are acquired through normal subscriptions or licensing fees associated with obtaining access to county records for tax information, property characteristics, or plat maps, as long as there is no additional charge to the title entity for the production, reproduction or delivery of the photographs. A generic cover letter with the printed standard letterhead of the title entity may be attached to the listing package. The cover letter may include a brief statement identifying by name only, which of the seven (7) permitted items of information are attached thereto. The cover letter may also contain a disclaimer as to conclusions of marketable ownership or encumbrances. The content of the cover letter or listing package is strictly limited to the foregoing and will specifically not include any advertising or marketing for the benefit of the recipient. (3-31-22)

c. Market value information, demographics, additions, addenda, photographs (other than as described in Paragraph 031.02.b) or other attachments, which attachments may be construed as conclusions reached by the title entity regarding matters of marketable ownership or encumbrances, may be provided, but only upon receipt of a charge commensurate with the actual cost of the work performed and the material furnished. (3-31-22)

d. A title entity may provide to licensed attorneys and licensed appraisers only the following documents without charge; (3-31-22)

i. A plat map reproduction; (3-31-22)

ii. A copy of applicable restrictive covenants; (3-31-22)

iii. The last deed appearing of record; and (3-31-22)

iv. A cover letter as described in Paragraph 031.02.b. (3-31-22)

03. Advertising With Trade Associations. (3-31-22)

a. No advertisement may be placed in a publication that is published or distributed by, or on behalf of, a producer of title business. Advertising in a trade association publication is only permitted if the publication is an official publication, published or distributed by, or on behalf of the trade association with at least regular annual publications. The publications should be nonexclusive (any title entity will have an equal opportunity to advertise in the publication and at a standard rate). The title entity's ad will be purely self-promotional. (3-31-22)

b. A title entity is permitted to donate time to serve on a trade association committee and may also serve as an officer or director for the trade association. A title entity may also donate, contribute or otherwise sponsor a trade association event if the event is a recognized association event that generally benefits all members and affiliated members in an equal manner. The donation cannot benefit selected producer of title business members of the association unless through random process. Solicitation for the donation should be made of all members and affiliated members in an equal manner. Donations are per agent license or insurer and are limited to a cumulative donation value of two thousand dollars ($2,000) or equivalent things of value collectively to all trade associations per year. In addition, a title entity is allowed to participate in or attend trade association events as long as the title entity pays a fee commensurate with fees paid by other participants in the events. These events include, but are not limited to, conventions, award banquets, symposiums, breakfasts, lunches, dinners, open houses, sporting activities and all other similar activities. (3-31-22)

04. Self-Promotional Advertising. (3-31-22)

a. A title entity may distribute self-promotional items having an acquisition value of less than twenty- five dollars ($25) to producers of title business, consumers, and members of the general public. These self-promotional items are limited to novelty gifts, advertising novelties, and generic business forms and specifically do not include food, beverages, gift certificates, gift cards, or other items that have a specific monetary value on their face or that may be exchanged for any other item having a specific monetary value. Self-promotional items will not contain the name, logo or any reference to a producer of title business, trade association or donee. (3-31-22)

b. Self-promotional functions are limited to the following two (2) types of functions: (3-31-22)

i. A title entity is permitted to conduct educational programs. The education programs will only address title insurance and escrow and other topics related thereto. A title entity is permitted to expend no more than twenty dollars ($20) per person at an educational program. For purposes of determining the maximum permitted expenditure, all costs associated with the delivery of the educational program is considered, including but not limited to, costs paid by the entity for travel, refreshments, instructor or speaking fees and facility rental. A title entity may participate in or make presentations at educational programs which are conducted or presented by other entities. The title entity is not permitted to expend any money to sponsor or cosponsor these programs, unless the educational program is a trade association event in which case Subsection 031.03.b of this chapter will apply. (3-31-22)

ii. A title entity is permitted to have two (2) open houses per year. An open house is a self-promotional function at the title entity's owned or occupied facility (i.e. a Christmas party or any party, an open house for remodeling of its facility, an open house for a new building to become the title entity's facility). It is nonexclusive (all producers of title business are invited). A title entity will not expend more than fifteen dollars ($15) per guest per open house. A title entity cannot combine permitted expenditures for two (2) open houses to be used for one (1) open house. A title entity also cannot accumulate left over or unused expenditures from one (1) open house and use those expenditures for a second open house. (3-31-22)

05. Permitted Business Entertainment. A title entity will not expend more than one hundred dollars ($100) per person per day for all meals and/or events. Meals and events will include, but not be limited to, breakfast, brunch, lunch, dinner, cocktails, sporting events, sporting activities, trips and music and art events. These meals or events may occur on or off the title entity's premises. In addition, a title entity may entertain no more than four (4) persons who are employed by or agents of any single producer of title business in a single day. Spouses and/or guests of the producers of title business or employees or agents are included in the count for purposes of determining the four (4) person maximum. In addition, a person cannot be entertained by a title entity more than three (3) days during any ten (10) day period of time. For purposes of determining the maximum permitted expenditure, all costs associated with any meals or events will be considered. This will include, but not be limited to, costs paid by the title entity for travel, transportation, hotel, equipment or facility rental, meals, cocktails, refreshments, registration or entry fees and event tickets. Entertainment permitted under this rule cannot be conditional upon or compensation for forwarding or directing title business to the title entity. (3-31-22)

06. Locale of the Title Insurer or Title Insurance Agent Employees. A title entity will not have any of its employees working in a work space location owned or leased by a producer of title business unless: (3-31-22)

a. The space is secured by a bona fide written lease or rental agreement. (3-31-22)

b. The space is separate from and can be secured against access by other occupants of the premises. (3-31-22)

c. The rental paid for the workspace is consistent with prevailing rental payments for similar space in the market area of the location of the work space. (3-31-22)

d. The rental is not dependent on volume of business and is paid only in cash (rental cannot be paid by trade or barter). (3-31-22)

e. The space is open to the conduct of business with any producer of title business or consumer. (3-31-22)

f. There is no sharing of employees. (3-31-22)

g. There is no common usage of space or equipment between the title entity and the producer of title business without a proportionate share of cost, rent, or expense paid by each party. (3-31-22)

07. Penalty. This Section emphasizes and restates the general penalties authorized pursuant to Title 41, Idaho Code, for violations of the anti-rebate and anti-illegal inducement laws. (3-31-22)

a. Section 41-2708(3), Idaho Code, provides that each person and entity giving or receiving a rebate, illegal inducement, or a reduction in rate is liable for three (3) times the amount of such rebate, illegal inducement, or reduced rate. In addition to this penalty, a title entity may also be subject to an administrative penalty as outlined below. (3-31-22)

b. Section 41-327, Idaho Code, provides that the Director may impose an administrative penalty not to exceed five thousand dollars ($5,000) and/or suspend or revoke an insurer's certificate of authority if the Director finds, after a hearing thereon, that the insurer has either violated or failed to comply with the Insurance Code. (3-31-22)

c. Section 41-1016, Idaho Code, provides that the Director may impose an administrative penalty not to exceed one thousand dollars ($1,000) and/or suspend or revoke an agent's license if the Director finds, after a hearing thereon, that the agent has either violated or failed to comply with the Insurance Code. (3-31-22)

Notes

Idaho Admin. Code r. 18.05.01.031