Bill > S577

This bill clarifies and expands the existing North Carolina law prohibiting kickbacks in title insurance transactions. The legislation maintains the core prohibition against individuals or entities involved in real estate transactions (such as property sellers, real estate agents, attorneys, or lenders) paying or receiving kickbacks, rebates, or commissions related to title insurance. However, it introduces important exceptions and nuanced guidelines. Specifically, the bill allows payments that are made due to ownership in a title insurance company or as employer-to-employee compensation, including sales commissions. The bill also requires that when there is an affiliation between the referring party and the title insurance company, a written disclosure must be provided to the title insurance purchaser, in line with federal Real Estate Settlement Procedures Act requirements. Violations of these provisions remain a Class 2 misdemeanor, potentially resulting in fines up to $5,000. A key definition in the bill specifies that a "bona fide" title insurance company must make genuine underwriting decisions and maintain a distinct staff and office. The bill will become effective on December 1, 2025, and will apply to offenses committed on or after that date, giving businesses time to adjust to the new regulations.

https://www.ncleg.gov/BillLookUp/2025/S577