Redfin reports death of an anti-rebate bill

Submitted by Joe Cline on March 14, 2008 - 6:04pm.

Does anyone know of a list of states that have anti-kickback legislation? I find it very interesting that since we have things like rule P53 in Texas which prohibits rebates and discounts to agents that the law allows rebates and discounts to the public. If all were to be fair we should either allow all rebates and discounts or disallow all rebates and discounts.

Maybe the folks in the title business in Texas just have a better lobby?

Joe

Avery Ranch Real Estate | Downtown Austin Condos, Downtown Austin Lofts

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Here is the full Rule for us in Texas.
P-53 REBATES & DISCOUNTS PROHIBITED
The Rule As Written

1} No person doing the business of title insurance under the authority of the Texas Title Insurance
Act of the Insurance Code (in this rule called an Authorized Person) and no Affiliate of an
Authorized Person shall, directly or indirectly, pay for or subsidize advertising or promotional
materials or activities of any Producer or Affiliate of a Producer in a position to make a referral of title insurance business. For the purposes of this

Rule:
a. A Producer is a real estate broker or agent, lender, mortgage company, mortgage broker,
builder, developer, attorney or architect or any Affiliate, but a person is not a Producer if the
person is an Authorized Person, or an Affiliate of Authorized Person(s), and

b. An Affiliate of a Producer or Authorized Person is an officer, director, agent or employee of
such a person, or a member of the immediate family of any of them, or a person who owns,
is owned by or is under common ownership with a Producer or Authorized Person, respectively.

2} An Authorized Person or Affiliate shall not, individually or jointly with a Producer or Affiliate, or with a person or group of persons or a company or group of companies that includes a Producer or Affiliate, advertise any particular real property or group of properties. Prohibited activities under this section are those which have the direct or indirect effect of subsidizing the business or advertising or promotional activities of any Producer or Affiliate of a Producer, including but not limited to, providing, paying for, subsidizing the cost of, or sponsoring signs advertising a property or group of properties for lease or sale, electronic or hard copy media describing, promoting or advertising a property or group of properties, or boxes or similar items in which to store such advertising media, or conducting, sponsoring or promoting or paying for any part of an event benefiting a Producer or Affiliate of a Producer (such as, without limitation, an open house, holiday party, or reception or convention event) including, but not limited to, providing or
furnishing prizes, food, beverages, gifts, decorations, entertainment or professional services.

3} An Authorized Person or Affiliate shall not provide or pay for any advertising medium that
subsidizes the business, products, services or promotional activities of a Producer or Affiliate of a Producer.

4} An Authorized Person or Affiliate shall not provide or pay for furnishings, postage, office supplies,electronic or hard copy documents or media, computer hardware or software, telephones,
telephone systems, copiers, fax machines, office equipment, vehicles, administrative, management
or staff services, rental space or office facilities for the use of any Producer or Affiliate of a Producer.

5} This Rule does not prohibit an Authorized Person or Affiliate from producing or distributing
promotional and educational materials about title insurance, loans and mortgages, laws and
legislation and related matters, provided: a) the Authorized Person or Affiliate is lawfully
authorized to do so, b) the name and business symbol of the Authorized Person or its Affiliate,
respectively are set out prominently on the cover and first page of the materials, and c) the
materials do not depict or include the name or business symbol of a Producer or Affiliate of a
Producer.

6} An Authorized Person or Affiliate shall not solicit or engage in a title insurance transaction(s)
involving land located in more than one state which includes land located in Texas if the policy
premium charged or solicited to be charged by that Authorized Person or Affiliate for the title
insurance policy issued in the transaction(s) covering land described in the policy outside the
state of Texas violates the law of that other jurisdiction where the land is located or the policy premium for the land in the other jurisdiction is so discounted or reduced from the normal and customary charge as to constitute a thing of value in this state.

7} Authorized Persons and Affiliates shall maintain auditable records documenting compliance with
this Rule.

8} In addition to any other sanction or penalty which the Commissioner may impose by law, after
notice and opportunity for hearing, any person (including a Producer or Authorized Person) found
to have violated this Rule is subject to a civil penalty of not more than $10,000 for each act of
violation and for each day of violation, unless a greater penalty is specified by the Insurance Code
or another insurance law of Texas. The Escrow Officer, Title Insurance Agent or Direct Operation
license or the certificate of authority of any person found in violation of this Rule may be
suspended or revoked, after notice and opportunity for hearing, for subsequent or repeated
violations of this Rule.

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