Historically, the Office of Financial and Insurance Regulation (OFIR) has required a producer business entity to obtain a separate FEIN and license for each office location. Effective January 3, 2013 an entity is no longer required to obtain a separate FEIN or license for each location; however, the entity must register each branch office location.
OFIR will begin accepting registration requests from licensed producer business entities on January 3, 2013. Form FIS-2268 will not be available on the OFIR website until that time. Please note the following when registering branch locations subsequent to initial licensure of the producer:
At least one designated responsible licensed producer (DRLP) will be required for the licensed business entity producer, regardless of the number of registered branch office locations. The requirement that the DRLP hold the same lines of authority as the business entity producer has not been changed. Additional DRLPs are not required for branch office locations.
The business entity producer will be held responsible for the activity of the branch office location. Compliance with all laws, rules and bulletins remains the responsibility of the DRLP and ultimately the licensed producer.
Registration will be effective the date the form is received at our office if completed properly.
Back dating of the registration request will not be allowed.
Branch office location address must be a physical address and cannot be a P.O. Box.
If a branch office location closes, the licensed producer must notify OFIR in writing within five (5) business days.
If a branch office location moves, the licensed producer must treat the move as a closed branch office location and register the new branch office location.
Please contact the Insurance Licensing Section with any questions by calling the OFIR toll-free number 877-999-6442 or by emailing email@example.com.
This is a Missouri case, Abengoa Bioenergy US Holding Inc. vs. Chicago Title Insurance Company, but there's a lesson here for all our members.
Chicago Title (CT) was hired by Abengoa to perform a radius search around a property in anticipation of a zoning change request. The idea is that the customer owned property, and needed to provide notice to every property owner within a certain area. CT was hired to identify each of those other property owners. CT apparently missed a number of the property owners, and the client ended up in protracted litigation which delayed their project.
Abengoa sued CT, and asserted damages of a very high dollar amount. CT argued there was a limitation clause on the search certificates provided to Abengoa which purported to limit the liability of CT to the $500 Abengoa paid for the certificate. The court said the limitation was not part of the initial agreement when the order was taken over the phone, and amounted to an attempt by CT to unilaterally amend the contract to add the limitation.
CT lost the trial, with a verdict returned in excess of $48 Million. CT appealed to the Court of Appeals, and to the Supreme Court of Missouri, and lost at both levels. With interest, they are now liable for over $50 Million.
We all try to limit our liability under a search to the amount paid for the search. There's a good argument in Michigan that we have a statutory scheme for insuring status of title holders to property, and that's title insurance, and if you want to be assured of who owns property, buy the policy. Anything attempting to insure (or assure) ownership of property is void and unenforceable as against public policy, because it would purport to circumvent our statutory title insurance laws.
However, that being said, nobody wants to be in the position of making those arguments, because that means you are likely involved in litigation and paying legal fees. So, a better practice may be to take the initial order, and follow up with a written agreement for the search prior to the work being done, which would limit liability. If the customer does not want to agree to a contract under those terms, they are free to go elsewhere.
Also, of note is that CT is on the hook because Abengoa’s agreement was directly with CT. An independent agent could not look to their underwriter for shared liability, but rather to their errors and omissions insurance carrier.
As always, if you have questions, please contact your underwriter.