The Office of General Counsel issued the following opinion on October 16, 2003, representing the position of the New York State Insurance Department.
Re: Sale of Fine Art Title Insurance in New York
Does title insurance for fine art fall within the ambit of title insurance as defined in N. Y. Ins. Law § 1113(a)(18) (McKinney Supp. 2003), thus, enabling a title insurer to offer such product in New York?
Title insurance for fine art falls within the ambit of title insurance as defined in N. Y. Ins. Law § 1113(a)(18) (McKinney Supp. 2003).
The inquirer seeks confirmation from the Department that its client may offer title insurance for fine art in New York.
N. Y. Ins. Law § 1113(a)(18) (McKinney Supp. 2003) provides:
(18) "Title insurance," means insuring owners of, and other persons lawfully interested in, real property and chattels real against loss by reason of defective titles and encumbrances and insuring the correctness of searches for all instruments, liens or charges affecting the title to such property, including power to procure and furnish information relative thereto, and such other incidental powers as are specifically granted in this chapter.
N. Y. Ins. Law § 1113(a)(30) (McKinney Supp. 2003) states, as follows:
(30) "Substantially similar kind of insurance," means such insurance which in the opinion of the superintendent is determined to be substantially similar to one of the foregoing kinds of insurance and thereupon for the purposes of this chapter shall be deemed to be included in that kind of insurance.
N. Y. Ins. Law § 6401(b) (McKinney 2000) provides as follows:
(b) "Title insurance policy" means any policy or contract insuring or guaranteeing the owners of real property and chattels real and other persons interested therein, or having liens thereon, against loss by reason of encumbrances thereon and defective titles.
This opinion will only address the permissibility of an insurer writing art title insurance coverage in New York. The Department has opined in previous opinions that a policy that insures title in regard to personal property is substantially similar to title insurance1 and, thus, may be written by a title insurance company and only such a company. The policy in question would insure title to personal property (fine art). Such policy coverages are analogous to title insurance policy coverages that covers real property and/or chattels real. Accordingly, the inquirers client may write such policies in New York only if it becomes licensed as a title insurance company.
Please note, however, that the inquirers client must also file its policy forms and rates with the Department in accordance with Article 23 of the Insurance Law and comply with the applicable sections of Article 64 of the Insurance Law.
For further information you may contact Associate Attorney D. Monica Marsh at the New York City Office.
1 Such decisions have been made in regard to, among other things, aircraft, boats and marine vessels and motor vehicles.