The Title Insurance Rate Service Association (TIRSA) has advised Stewart Title Insurance Company that the New York State Department of Financial Services (NYSDFS) has required all title insurance underwriters operating in New York State to collect income and expense data for 2017 from their independent Licensed Title Agents. The information is due by March 30, 2018. The NYSDFS has directed that the information contained in the Schedule U-4, be collected from licensed independent Agents for the period of January 1, 2017 through December 31, 2017. If you represent multiple underwriters you will receive a similar request for data from your other underwriters and will be required to complete the U-4 schedule for each underwriter.
Stewart has created https://www.nydatacall.com/ to collect this information. This web site will afford you a secure, confidential and efficient method to provide the requested data to TIRSA/NYSDFS. The secure web site will mirror the NYSDFS request for data in schedule U-4. All individual office information will be kept strictly confidential and only the aggregate of all lines on the U-4 will be reported to TIRSA for their report to the NYDFS.
If you were appointed by Stewart Title Insurance Company as a policy issuing agent in 2017, you must report the information to the DFS. Please note: the following new regulation affecting the Data Call. Pursuant to NY regulation 208:
Section 228.3 (2) Every title insurance corporation and every title insurance agent, except as provided in subdivision (d) of this section, shall report all expenditures made for meals and beverages, entertainment, gifts, outings, parties, sponsorships, seminars and continuing education, charitable contributions, and political contributions as separate line items in supplemental expense schedules to the expense schedules submitted annually to the department’s statistical agent. The statistical agent shall include the supplemental expense schedule data in the annual statistical report submitted to the superintendent.
Section 228.3 (d) (1) Every title insurance corporation shall provide the annual agent data call to every title insurance agent that it has appointed to act as an agent in this State, with the exception of those title insurance agents on whose behalf the title insurance corporation reports revenue and expenses. Every title insurance agent who receives the agent data call shall complete an expense schedule and a revenue schedule, including premium and all other operating income, for each title insurance corporation that appointed it as an agent and shall timely submit to each such title insurance corporation revenue and expense schedules associated with the issuance of that title insurance corporation’s policies. The title insurance agent shall allocate expenses based upon premiums written for each title insurance corporation unless a compelling reason exists to allocate in a different manner. If the title insurance agent allocates expenses on another basis, it shall specify the basis and the reason for doing so. Every title insurance agent whose revenue and expenses are not reported by another entity shall also prepare and maintain an expense schedule and a revenue schedule setting forth the title insurance agent’s total annual revenue and expenses.
228.3 (5) Every title insurance corporation shall report to the superintendent, within 30 days after the title insurance agent was due to submit the revenue and expense schedules, the name and license number of any appointed title insurance agent that is required to submit the schedules but does not do so.
To access the site you must use Internet Explorer and direct your browser to https://www.nydatacall.com/ . The process to complete this data call is as follows:
· Hit Login on the page https://www.nydatacall.com/
· Username is your six digit Agent ID
· Password is your six digit Agent ID plus "Ny!" (ex: 123456Ny!)
· The first time you log on it requests you change your password:
o Current password is your six digit Agent ID plus "Ny!"
o New Password - any password you like that meets the below requirements:
1 The minimum length required for a password is 8.
2 Password must match 3 of these 4 character categories:
1 at least 1 upper case character
2 at least 1 lower case character
3 at least 1 numerical character
4 at least 1 of these special characters @#!%&
o Confirm new password - type new password again
o Hit Continue
· Company Verification - You can edit address, phone, fax and website data but not Agent ID or Company Name
· Personal Verification - Enter the name, etc. of the person filling out the form
· Read the introduction and FAQ
· Begin Entering Data
· If you cannot complete the questionnaire in one sitting, you can close Internet Explorer and access the site later. Some things to remember:
o Your new password to access the site
o The data is saved up to the point you hit the "next" button so if you want to leave a screen and have already inputted data in that screen, make sure to hit next so that the system saves the data
· If you have questions on the line item you can hit the text "Help" on the upper right hand side and scroll to the Line Item number in question.
· Once you submit the data you cannot edit the form.
· You can print out a worksheet to save.
· The final work sheet will list the data in all three parts to the submission.
The data needs to be completed by March 30, 2018
We understand that you may not keep track of your expenses by individual underwriter, except for the amount of premium remitted. You are to distribute all expenses allocated to New York among your underwriters in proportion to the dollars of premium written directly. The new section related to Non-Title related income should also be allocated to underwriter as needed using the proportion of dollars of premium written directly. You are to report premium remitted as actually remitted to each underwriter.
CASH VS ACCRUAL ACCOUNTING
All reporting should be done as if the reporting entity was a cash basis taxpayer. Only include revenue from transactions closed in 2017 and expenses actually paid in 2017.
MUNICIPAL SEARCH INCOME AND EXPENSES
Income derived from and expenses related to municipal searches should not be reported on lines 1 through 3 on this schedule. Such income and expenses should be included in lines 7 through 9 as appropriate.
AGENTS OPERATING IN MULTIPLE STATES
This report covers only New York operations. We understand that you may not keep track of all your expenses by individual state. If you have expenses that support operations in multiple states, allocate a portion of these expenses to New York by multiplying the total expenses by the ratio of New York total revenue to total revenue in all states in which you operate.
AGENTS OPERATING AS PART OF A LAW FIRM OR OTHER BUSINESS
This report covers only expenses relating to title insurance operations. At the request of the NYSDFS, we have added a section related to Non-title related income. We understand that agents may not maintain separate accounting for their title insurance operations. If you have direct or allocated New York expenses that support both title insurance operations and other operations, allocate a portion of your New York expenses to New York title insurance operations by multiplying the expense by the ratio of retained New York title insurance premium to total New York revenues for your operations.
INSTRUCTIONS FOR COMPLETION
The reporting Schedule is set forth in the separate work sheets provided on the web site. The data needs to be completed by March 30, 2018.
NOTE THAT THERE ARE THREE PARTS TO THE SUBMISSION.
Instructions for completing all three parts are provided below.
Part 1 Instructions
Enter amounts on each line as follows:
This year, as requested by NYSDFS, we have added a section relating ot non-title Insurance Income, see additional line instructions below:
Line 1 - Policy Charges - Report premiums from policies priced under manual rates excluding endorsement premiums.
Line 2 - Endorsements - Report all endorsement premiums
Line 3 - Special Charges - Include charges for:
· Special Risks - Affirmative Coverage
· Affirmative Covenant Insurance - Existing Construction
· Construction Loan Continuation Searches beyond 5
· Commercial Contract Vendee Continuation Searches beyond 5
· Option Insurance Continuation Searches
· Mortgage Foreclosure Guarantees
· Recorded Document Certificates with Open Order
· Recorded Document Certificates with No Open Order
Line 4 - Gross Title Insurance Charges - Sum of Lines 1, 2 and 3 (NOTE: Total is shown on Final Schedule)
Line 5 - Amount Remitted to Underwriter - Report the amount of premium remitted to the underwriter covered by this report. If you write for more than one underwriter, do not report the total remitted to all underwriters. The total must be broken down so that the amount remitted to each underwriter is reported only on the report for that underwriter.
Line 6 - Retained Title Insurance Charges - Line 4 less Line 5 (NOTE: Total is shown on Final Schedule)
Line 7 - Closing and Escrow Income - Report all income related to closing and escrow activities.
Line 8 - Section 1-F Related Income - Report all income related to Section 1-F of the TIRSA manual.
Section 1-Rates and Rules (TIRSA Rate Manual 8/1/2015)
The Company may impose additional work charges in especially difficult titles. Extra charges may be made at or after the receipt of the application for examination of title which may involve additional tax lots, multiple chains of title, land under water, land in bed of streets, rights-of-way, driveways, easements, strips and gores, foreclosures, proceedings under federal bankruptcy or state insolvency related statutes, or which involve other unusual difficulties, or for unusual expenditures for travel, or for recording instruments, telephone, telegraph or delivery charges. The Company may impose additional charges for closing attendance in excess of two hours and for any closings extending beyond normal business hours and where additional attendances are necessary or travel arrangements and distance warrant.
Line 9 - Other Income - income reported here should include:
· All income derived from the activities of acting as a licensed New York State title agent not shown in Lines 1 through 8.
· All income from ancillary of discretionary charges, related to the issuance of the title insurance policy, as reflected on the title bill to the consumer and or insured.
This line is not limited to income derived from the issuance of a title insurance policy by a licensed New York State title agent.
Line 10 - Total Non-Title Income - Sum of lines 7, 8 and 9 (NOTE: Total is shown on Final Schedule)
We understand that some agents do not keep track of all of their expenses according to the categories identified below. If you do not maintain separate accounting for these categories, we ask that you allocate expenses between these categories using your best professional judgment.
Line 11 - Search & Exam Costs Paid to Independent Searchers - includes payments to non-employees for abstracts, title reports, chain of title documents, etc.
Line 12 - Purchase of Copies of Public Record - includes payments to government entities for paper copies of deeds, mortgages, judgments, etc.; fees to government entities for online access to databases such as real estate tax records, etc. Do not include fees paid to private data providers, which are reported on line 22.
Line 13 - Salaries - Include:
- Salaries of both full-time and part-time personnel.
- Compensation paid on an hourly basis
- Sales Commissions
- Contract Labor Expenses
- Partnership draws (if organized as a partnership) Note: Agents conducting business in multiple states are required to make reasonable allocation of salaries for title insurance operations in New York State. Similar allocations need to be made for agents that are part of a law form of have multiple underwriters.
Line 14 - Employee Benefits include group insurance (life, health, dental, disability, etc.), company contributions to profit-sharing plans, company contributions to 401(k) plans, etc.
Line 15 - Payroll Taxes include city, state and Federal levies on payroll (including company portion of Social Security, Medicare, unemployment, etc.)
Line 16 - Rent and Rent Items includes all utilities (i.e., heat, light, power, water), rental of main office, branch offices, and other offices; non-rental payments under net leases (utilities, taxes, etc.); maintenance expenses (janitorial supplies and services, repairs, etc.), etc.
Line 17 - Real Estate Expenses include expenses for real estate your agency owns, such as janitorial services, real property insurance, interest on mortgage loans, etc.
Line 18 - Real Estate Taxes include real estate taxes for real estate your agency owns.
Line 19 - Taxes, Licenses, and Fees include non-real-estate-related and non-payroll taxes EXCLUDING state and Federal income taxes.
Line 20 - Advertising General Expenses includes advertising space purchased in Yellow Pages, advertising spots purchased on radio and television, billboards, advertising space purchased in trade or popular newspapers and magazines, etc. Additional details for this expense category are to be provided on Part 2. The specific category of expenses are set forth as lines 20.01 thru 20.12 on the web site. The total amount for this expense category on Part 2 must agree to the amount reported on Part 1.
Line 21 - Marketing and Promotional Expenses General Expenses include the cost of pens, pads, calendars, and similar materials distributed to customers; costs for providing training seminars; event sponsorships; costs of maintaining a website; costs of telemarketers; cost of newsletters and other marketing materials distributed to customers; etc. Additional details for this expense category are to be provided on Part 2. The specific category of expenses are set forth as lines 21.01 thru 21.10 on the web site. The total amount for this expense category on Part 2 must agree to the amount reported on Part 1.
Line 22 - Title Plant Maintenance and Rental includes the costs of maintenance of any daily takeoff title or abstract plant and/or back title plant; and payments for the right to access another company's title or abstract plant, back title files, and copies of the public record that are obtained from a private company.
Line 23 - Travel includes cost of tickets for public transportation, including trains and airlines; all automobile expenses paid including cost of automobile lease or rental; depreciation of owned automobiles; cost of hotels and meals; etc. Only expenses relating to employees or officers are to be reported on line 19. The specific category of expenses are set forth as lines 23.01 thru 23.08 on the web site. Additional details for this expense category are to be provided on Part 2. The total amount for this expense category on Part 2 must agree to the amount reported on Part 1.
Line 24 - Printing and Office Supplies including copier expenses.
Line 25 - Postage, Telephone and Freight includes cost of stamps, local and long-distance telephone service, leased dedicated telephone lines (such as T1 or T3 lines), internet services, Federal Express, UPS, etc.
Line 26 - Equipment Depreciation and Rental (Non-EDP) includes rental or depreciation charges for furniture, copiers, fax machines, telecommunications equipment, and other non-computer office equipment;
Line 27 - Cost or Depreciation of EDP Equipment and Software includes cost of leasing or depreciation charges on computer equipment including laptops, desktops, servers, network attached storage, etc.; cost of purchased software; cost of software licensing and upgrade agreements; etc.
Line 28 - Errors and Omissions Insurance
Line 29 - Other Insurance includes property insurance, liability insurance, fidelity and surety bonds, etc.
Line 30 - Director's Fees, including expense allowances for travel to Board meetings.
Line 31 - Boards and Associations includes dues paid by your agency for itself or for its employees to trade and professional associations (e.g., American Land Title Association, New York State Land Title Association, Chamber of Commerce, bar associations, etc.); fees to attend professional and trade association meetings; etc.
Line 32 - Legal and Auditing includes fees paid to outside accounting firms and law firms
Line 33 - Bad Debts includes amounts originally booked as income that were written off as uncollectable including any charge offs. Please include any unreimbursed Closing / Escrow losses and any Abstract / Search losses (from abstracts /searches sold) in this category. Unreimbursed title losses paid (i.e., losses paid by the agent, but not reimbursed by the underwriter) are also to be included in this line. Note that any expense items that can be reported on Lines above are to be reported on those lines and not reported on Line 33.
Line 34 - Interest includes interest paid to banks and/or suppliers. It excludes mortgage interest reported on Line 17.
Line 35 - Other includes all expenses not reported on Lines 15 to 34. Additional details for this expense category are to be provided on Part 2. The total amount for this expense category on Part 2 must agree to the amount reported on Part 1.
Line 36 - Total Expenses is the sum of Lines 11 to 35
Line 37 - Net is Line 6 less Line 36
Line 38 - Number of Employees is the number of full-time equivalent personnel (i.e., report two half-time employees as one full-time equivalent employee)
Part 2 Instructions (General Expenses additional detail)
The NYSDFS has requested that all agents provide additional detail for the amounts reported in the following expense categories:
· Advertising Expense (Part 1 Line 20)
· Marketing and Promotional Expenses (Part 1 Line 21)
· Travel (Part 1 Line 23)
· Other (Part 1 Line 35)
In Part 2 of the schedule we have provided a line for each of several possible expense types that may appear in the broader categories mentioned above and displayed on Part 1 (On the web site listed as Lines 16.01 to 31.06). Please enter the amounts for each of these categories in the sub number to comply with Part 2. Within each of the four main categories, there is also provided an "Other" line to accommodate the entry of any amounts not covered by the items explicitly identified. Note: it is important that the sums of the detailed items in Part 2 for each category agree with the amounts reported on Part 1.
Part 3 Instructions
Note that Part 3 on the web site is the "other section" provided to you for ease of data submission. Part 3 is a separate submission to TIRSA/DFS. For your information, after receiving the responses to this agent call, the underwriters will be required to submit Part 3 for each individual responding agent to Milliman. Milliman is the Statistical Consultant for TIRSA for the 2017 Data Call. Milliman will then transmit these files to TIRSA and TIRSA will then provide these sheets to the NYSDFS. The individual agency name and other identifying information have been removed from Part 3.
In the event that amounts have been entered in the "Other" line for Advertising Expenses (20.12), Marketing and Promotional Expenses (21.10), Travel Expenses (23.08) or Other Expenses (35.06) in Part 2, enter a detailed description for each of the items that fall within these "Other" lines. 10 lines have been provided for each of the 4 categories. Also, provide an overall amount for each item entered on Part 3 if possible.
Note: It is important that the sum of the detailed items in Part 3 for each category agree with the amount reported on Part 2.
We know that this data call may be difficult for each office to accomplish and we stand ready to assist you. We appreciate your best efforts to assist in the full compliance with the NYSID directive.
Attached is a sample of the U-4 Schedule for 2017. Please do not hesitate to contact company counsel at (212)-922-0050 with any questions you might have.
Forms: U-4 Schedule
Attachments: Milliman Letter 2017; U-4 Instructions