Title Insurance Agency
Businesses involved in the title insurance industry must be licensed to provide the services they offer. Title insurance agency license requirements vary by state. If you are interested in starting a title insurance agency or want to expand your business to new states, keep reading.
What Does a Title Insurance Agency Do?
Title insurance agencies act as a third party for lenders and buyers. The work title insurance agencies do requires complex research and professional coordination. Agencies are responsible for several tasks, including but not limited to the following:
- Records Search. Title agencies need to conduct extensive county records research to determine if there are any issues attached to a new property title. Agencies consolidate this information into a single report and share it with buyers and sellers.
- Insurance. Title insurance agencies typically offer buyers title insurance. It’s their job to protect all stakeholders when issues arise. Purchased coverage often pays for problems uncovered during the records review process. It’s important to note that most lenders require title insurance before finalizing a deal.
- Closing and Escrow. Title agencies sometimes act as the closing agent or escrow officer for a real estate purchase. The agency represents buyers and sellers in a given transaction by managing and transferring funds for their clients. It’s the responsibility of the title agency to retrieve document signatures, collect and hold payments, and distribute payments to the appropriate parties.
While the terms “title company” and “title agency” are sometimes used interchangeably, they are two different types of businesses. A title company directly issues title insurance to purchasers and lenders, as well as builders and developers. A title agency is a subcontractor that represents a title company in a real estate transaction. The title agency’s job is to underwrite the title before the title company issues the insurance policy.
Title Insurance Agency License Requirements
While state requirements vary, many agencies looking to provide title insurance services have to go through a state-approved pre-licensing course. Courses are offered in person and online. An exam follows the pre-licensing course. The exam is available at testing centers throughout the state as well as through a remotely proctored exam. The process in Virginia is similar to what other states across the country require in terms of licensing for title insurance agencies.
Separate licenses are typically required when a business wants to provide services outside of its domicile. Application fees vary depending on the state. It’s essential to understand the different requirements to ensure businesses are being operated legally.
Most companies doing business also need to register their entity with the secretary of state and appoint a registered agent. We make preparing and filing applications easy and handle communication with government agencies on your behalf. With our software, you can track your registration status, license numbers, filing history, fees, and renewals 24/7.
There’s also the matter of continuing education. Some states require title insurance agency license holders to pursue post-secondary programs on an annual basis. This ensures business entities are aware of changes to the industry and can continue following best practices.
The Importance of Compliance
Title insurance agencies need to ensure they comply with state regulations to operate without interruption. Common penalties include blocked commissions and fines if a title insurance agency fails to comply with state licensing requirements. Monetary penalties range from hundreds to thousands of dollars depending on the state and the severity of the compliance failure.
States also have the right to suspend or revoke title insurance licenses. This is sometimes done with an order of Cease and Desist from engaging in insurance business in that given state. Additionally, states may have the unlicensed agency pay all valid unpaid claims of their clients.
Fortunately, Harbor Compliance makes the path to compliance easy with our expert service team and easy-to-use software. When you reach out to our specialists, we can review your business’s compliance status and help you determine what steps you need to take to move forward with registrations and renewals.
Renewing a Title Insurance Agency License
Once an agency has obtained a title insurance license, it’s imperative to follow state renewal requirements. Processes vary, but most states require annual or biennial renewal. The renewal process ensures businesses stay compliant with state laws and regulations and protects consumers from working with illegitimate companies.
State requirements for title insurance agency licenses vary drastically. Understanding the specific laws and regulations that apply to your business’s license is crucial. In addition, state laws frequently change, so it can be challenging to stay on top of changes. At Harbor Compliance, our Entity Manager software simplifies accurate due date tracking and on-time filing. This way, your business will continue to be compliant with state and local requirements, and you will have the time you need to continue working and expanding your clientele.
Click on the links below to view TPA license requirements by state.
The Harbor Compliance License Manager helps insurance professionals maintain their licenses by automating repetitive tasks like tracking renewals. Through License Manager, you can also access reference data for the states in which you work. This information reduces the time you need to spend researching state requirements. Contact our licensing experts today to learn more.
Adjuster - A person or firm that is paid to adjust, investigate, and negotiate claim settlements. There are 3 categories of adjusters: company, independent, and public. Company adjusters work for insurance companies and investigate claims on behalf of the company. Independent adjusters investigate claims on a contractual basis for insurance companies. Public adjusters investigate claims on behalf of claimants, usually to determine the amount of money that can be claimed.
Agent in Charge - A licensed individual responsible for the supervision of all individuals within an insurance agency. The agent in charge must be licensed in the same lines as the agency.
Insurance Agent - Insurance agents act as intermediaries between the insurance company and policyholders. Agents can be either captive or independent. Captive agents represent a single insurance company, while independent agents represent multiple insurers.
Insurance Broker - Individuals who sell insurance policies while representing the interests of the buyer. Brokers are typically independent intermediaries without an insurance company affiliation.
Insurance Producer - May be used to refer to either individual insurance agents and brokers or insurance agencies and brokerages.
Managing General Agent - An agent or broker that is involved in underwriting and has other areas of authority normally handled by insurers. MGAs are typically involved in unusual lines of coverage or in geographically prohibitive areas.
Surplus Lines Insurer - An insurance carrier that takes on risks that a licensed carrier is unwilling to insure. Surplus lines insurers do not have access to state guaranty funds and are less tightly regulated by state governing bodies.
Third Party Administrator - An organization that manages group insurance policies and works with the employer and insurance carrier to process claims, handle loss control, and provide risk management and consulting services.
Title Agent - Title agents sell insurance that protects real estate owners against loss of ownership of a property due to a legal claim.
Viatical Settlement Provider - A company that purchases life insurance policies at a discount from individuals seeking immediately available funds.
Independent Insurance Agents and Brokers of America (Big “I”)
Advocacy group of independent insurance brokers and agents.
National Association of Insurance and Financial Advisors (NAIFA)
Professional association that advocates for favorable regulatory conditions for insurance agents and financial advisors.
National Association of Insurance Companies (NAIC)
A standard setting and regulatory support organization that is governed by state insurance regulators.
National Association of Professional Insurance Agents (PIA)
Professional association that provides education and advocacy for insurance agents throughout the United States.
National Insurance Producer Registry (NIPR)
An affiliate of the NAIC that provides streamlined and uniform producer licensing processes.