Revise the joint venture title insurance company law

As Introduced

136th
General Assembly

Regular
Session
H. B. No. 230

2025-2026

Representative Thomas, D.

To
amend sections 3953.01, 3953.21, 3953.26, and 3953.331; to enact new
section 3953.36; and to repeal section 3953.36 of the Revised Code
to
amend the law related to joint venture title insurance companies.

BE
IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section
1.
That
sections 3953.01, 3953.21, 3953.26, and 3953.331 be amended and new
section 3953.36 of the Revised Code be enacted to read as follows:

Sec.
3953.01.
As
used in this chapter:

(A)
"Title insurance" means insuring, guaranteeing, or
indemnifying owners of real property or others interested in real
property against loss or damage suffered by reason of liens or
encumbrances upon, defect in, or the unmarketability of the title to
the real property, guaranteeing, warranting, or otherwise insuring by
a title insurance company the correctness of searches relating to the
title to real property, or doing any business in substance equivalent
to any of the foregoing.

(B)
"The business of title insurance" means the following:

(1)
The making as insurer, guarantor, or surety, or proposing to make as
insurer, guarantor, or surety, any contract or policy of title
insurance;

(2)
The transacting, or proposing to transact, any phase of title
insurance, including solicitation, negotiation preliminary to
execution, execution of a contract of title insurance, insuring, and
transacting matters subsequent to the execution of the contract and
arising out of it, including reinsurance;

(3)
The doing or proposing to do any business in substance equivalent to
any of the foregoing.

(C)
"Title insurance company" means any of the following:

(1)
Any domestic title guaranty company and domestic title guarantee and
trust company to the extent that they are engaged in the business of
title insurance;

(2)
Any domestic company organized under this chapter for the purpose of
insuring titles to real property;

(3)
Any title insurance company organized under the laws of another state
or foreign government;

(4)
Any domestic or foreign company that has the powers and is authorized
to insure titles to real estate within this state on December 12,
1967, and that meets the requirements of this chapter.

(D)
"Applicants for insurance" includes all those, whether or
not a prospective insured, who from time to time apply to a title
insurance company or to its agent for title insurance and who at the
time of that application are not agents for a title insurance
company.

(E)
"Risk premium" for title insurance means that portion of
the fee charged by a title insurance company, agent of a title
insurance company, or approved attorney of a title insurance company
to an insured or an applicant for insurance for the assumption by the
title insurance company of the risk created by the issuance of the
title insurance policy.

(F)
"Fee" for title insurance means the risk premium,
abstracting or searching charge, examination charge, and every other
charge, exclusive of settlement, closing, or escrow charges, whether
denominated premium or otherwise, made by a title insurance company,
agent of a title insurance company, or an approved attorney of a
title insurance company to an insured or an applicant for insurance
for any policy or contract for the issuance of title insurance. "Fee"
does not include any charges paid to and retained by an attorney at
law or abstractor acting as an independent contractor whether or not
the attorney or abstractor is acting as an agent of a title insurance
company or an approved attorney and does not include any charges made
for special services not constituting title insurance, even though
performed in connection with a title insurance policy or contract.

(G)
"Approved attorney" means an attorney at law who is not an
employee of a title insurance company or a title insurance agent and
upon whose examination of title and report on the examination a title
insurance company may issue a policy of title insurance.

(H)
"Title insurance agent" means a person, partnership, or
corporation authorized in writing by a title insurance company to
solicit insurance and collect premiums and to issue or countersign
policies on its behalf. "Title insurance agent" does not
include officers and salaried employees of any title insurance
company authorized to do a title insurance business within this
state.

(I)
"Single insurance risk" means the insured amount of any
policy or contract of title insurance issued by a title insurance
company.

(J)
"Foreign title insurance company" means a title insurance
company organized under the laws of any state or territory of the
United States or the District of Columbia.

(K)
"Alien title insurance company" means a title insurance
company that is incorporated or organized under the laws of any
foreign nation or any province or territory of a foreign nation and
that is not a foreign title insurance company.

(L)
"Non-directed escrow funds" means any funds delivered to a
title insurance agent or title insurance company with instructions to
hold or disburse the funds pursuant to a transaction in which a title
insurance policy will be issued, but without written instructions to
either deposit the funds in an account for the benefit of a specific
person or to pay the interest earned on the funds to a specific
person.

(M)
"Business day" means any day, other than a Saturday or
Sunday, or a legal holiday, on which a bank, savings and loan
association, credit union, or savings bank is open to the public for
carrying on substantially all of its functions.

(N)
"Housing accommodations" and "restrictive covenant"
have the same meanings as in section 4112.01 of the Revised Code.

(O)
"Joint venture" means
an
arrangement undertaken jointly by two or more parties in regard to
ownership of
a

business
entity
a

title
insurance
company
or title insurance
agent

that has one or more beneficial owners
.

(P)
"Beneficial owner" means a person or entity to which both
of the following apply:

(1)
The person or entity receives a financial benefit from a joint
venture through direct ownership or ownership of a subsidiary, sister
entity, or parent entity, regardless of whether such subsidiary,
sister entity, or parent entity is, itself, a direct owner of the
joint venture.

(2)
The person or entity is one or more of the following:

(a)
A real estate agent, as defined in section 4735.51 of the Revised
Code, including a real estate broker or salesperson, as those terms
are defined in section 4735.01 of the Revised Code;

(b)
A home builder;

(c)
A mortgage lender, including a financial institution as defined in
section 9.02 of the Revised Code, credit union as defined in section
1733.01 of the Revised Code, and individuals associated with those
entities;

(d)
An attorney who is associated or in a business relationship with, and
who has the ability to receive title insurance business from, or
refer title insurance business to, any person or entity described in
divisions (P)(2)(a), (b), or (c) of this section.

Sec.
3953.21.
(A)
Every title insurance company authorized to transact business within
this state shall certify annually to the superintendent of insurance
the names of all title insurance agents representing it in this state
in accordance with section 3905.20 of the Revised Code.

(B)
No
title
insurance company shall permit any of the following to act as the
company's agent:

(1)
A
bank,
trust company, bank and trust company, or other lending institution,
mortgage service, brokerage, mortgage guaranty company, escrow
company,
or

real
estate company

or any subsidiaries thereof or any individuals so engaged shall be
permitted to act as an agent for a title insurance company
;

(2)
A person acting individually in a capacity described in division
(B)(1) of this section;

(3)
An employee, representative, or agent of a person or entity described
in division (B)(1) or (2) of this section;

(4)
A person or entity related to a person or entity described in
division (B)(1), (2), or (3) of this section by a common ownership
structure, such as a holding, parent, sibling, or subsidiary company
.

Sec.
3953.26.
(A)

No
title insurance company and no title insurance agent shall pay or
give
,
either directly or indirectly,

any
commission
or any part of its fees or charges, or any other consideration or
valuable thing, as an inducement for, or as compensation for, any
title insurance business, to any of the following:

(1)
Any
applicant
for insurance
,
or to any
;

(2)
Any
person,
firm, or corporation who is acting as agent, representative,
attorney, or employee of the owner, lessee, mortgagee, or of the
prospective owner, lessee, or mortgagee of the real property or any
interest therein
,
either directly or indirectly, any commission or any part of its fees
or charges, or any other consideration or valuable thing, as an
inducement for, or as compensation for, any title insurance business
;

(3)
Any family member of the applicant for insurance or of the current or
prospective owner, lessee, or mortgagee of any interest in the real
property
.

(B)

Nothing in this section shall preclude
the

either
of the following:

(1)
The
payment
by a title insurance company of a commission to any attorney,
if
said
provided
that
attorney
is also a licensed title insurance agent of such title insurance
company
,
or the

and is not an employee of the current or prospective owner, lessee,
mortgagee of the real property or any interest therein;

(2)
The
payment
by
such

a

title
insurance company or its agent of a fee to an attorney for services
rendered in the examination of title or certification thereof.

Sec.
3953.331.
(A)
For a title insurance agency

that is a joint venture
,
the annual review required under section 3953.33 of the Revised Code
shall
demonstrate
that
assess
whether the agency is a joint venture and, if so, whether
all

members

beneficial
owners
of
the joint venture received revenue during the year in question from
the title agency commensurate to their ownership interest in the
title agency. The superintendent of insurance shall promulgate rules
under Chapter 119. of the Revised Code setting forth the standards of
the review required under this section and the form in which this
information is to be provided.

(B)
Title insurance agencies that are joint ventures shall maintain
sufficient records of their affairs, including their escrow
operations, escrow trust accounts, and operating accounts so that the
superintendent may adequately ensure that the title insurance agency
that is a joint venture and all members of the joint venture are in
compliance with the requirements of this section. Records kept
pursuant to this section shall be kept for a period of not less than
ten years following the transactions to which the records relate. The
superintendent may prescribe the specific records and documents to be
kept.

Sec.
3953.36.
(A)
No joint venture shall require in its initial articles of
organization, articles of incorporation, operating agreement, or
other incorporating documents, sooner than five years after the date
the joint venture is formed, either of the following:

(1)
Dissolution of the joint venture;

(2)
Subject to divisions (B) and (C) of this section, buy-back or sale of
any ownership interests in the joint venture or any subsidiary of the
joint venture.

(B)
No joint venture or subsidiary of a joint venture shall require in
its articles of organization, articles of incorporation, operating
agreement, or other operating or management documents the buy-back or
sale of any beneficial owner's ownership interest in the joint
venture or subsidiary due to volume of referrals, or lack thereof, of
real estate or title insurance business from a beneficial owner.

(C)
A joint venture or subsidiary of a joint venture may require a
beneficial owner to sell the owner's ownership interests back to the
joint venture, subsidiary, or to another party if any of the
following apply:

(1)
The beneficial owner is charged with, convicted of, or pleads guilty
to a criminal act.

(2)
The beneficial owner ceases to work in the real estate industry.

(3)
The professional license that qualifies the owner as a beneficial
owner for the purposes of this chapter is surrendered, suspended, or
revoked.

(4)
The beneficial owner files for bankruptcy.

(5)
The beneficial owner commits, coerces to commit, or otherwise
attempts to commit acts, by and through the joint venture, that do
any of the following:

(a)
Plausibly create legal liability for the joint venture or the joint
venture's owners, agents, or employees;

(b)
Jeopardize the licensure of the joint venture, including the
individual licenses of the joint venture's owners, agents, notaries,
or attorneys;

(c)
Harm the reputation of the joint venture or the joint venture's
agents or employees in the marketplace.

Section
2.
That
existing sections 3953.01, 3953.21, 3953.26, and 3953.331 and section
3953.36 of the Revised Code are hereby repealed.