Affiliated Business Arrangements

PURPOSE: This regulation prescribes requirements for disclosure to customers and reporting to the director of affiliated business arrangements. (1) Disclosure to Customer. (A) It is unlawful for a title insurer, title agency or title agent to accept an order for title services from any producer with an affiliated business arrangement, unless contemporaneous with the referral, the title insurer, title agency or title agent discloses the affiliated business arrangement or has taken reasonable steps to verify that the producer has disclosed the arrangement. Disclosure to its customer of the existence of the affiliated business arrangement may be made by using the Affiliated Business Disclosure form (Form T-4), or any form that substantially comports with the specified form. (B) The disclosure required by this rule may be made in combination with all disclosures made under rule 20 CSR 500-7.050. (2) Annual Reports. (A) The Agency Financial Interest Report. 1. Title agencies are required under section 381.029.3, RSMo, to report the agency’s owners, the agency’s ownership interests in other persons or businesses, and material transactions between the parties. Such report shall be filed with the department by March 31 of each year using The Agency Financial Interest Report (Form T-5A). Title agencies shall update and resubmit this Form T-5A within thirty (30) days of any material change to the information submitted regarding the agency’s financial interests, parties with financial interests in the agency, or parties with financial interests in the insurer, agency, or agent who are producers or associates of producers. 2. Information related to material transactions collected pursuant to Form T-5A will be treated by the department as a trade secret as defined by section 417.453(4), RSMo, inasmuch as such information possesses economic value by virtue of its confidential status; the same or like information is unavailable through other sources; and insurers have made reasonable efforts to maintain the confidentiality of the data. As such, all information submitted pursuant to Form T-5A, shall be considered confidential communications and immune from requests made under Chapter 610, RSMo, nor shall such information otherwise be made available to the public or unauthorized individuals except in response to a valid court order. (B) The Affiliated Business Arrangement Report. Title insurers, agencies, and agents are required under section 381.029.4, RSMo, to file reports with the director setting forth the names and addresses of any persons with a financial interest in the insurer, agency, or agent, which the insurer, agency, or agent knows to be producers or associates of producers, except the duty to report shall not include shareholders of record of any publicly-traded insurer. Such report shall be filed with the department by March 31 of each year using The Affiliated Business Arrangement Report (Form T-5B). AUTHORITY: section 374.045, RSMo 2000 and sections 381.029.3 and 381.042, RSMo Supp. 2007.* Emergency rule filed Jan. 16, 2008, effective Jan. 28, 2008, expired July 14, 2008. Original rule filed Jan. 16, 2008, effective Sept. 30, 2008. *Original authority: 374.045, RSMo 1967, amended 1993, 1995; 381.029, RSMo 2007; and 381.042, RSMo 2000, amended 2007.