Starting Your Own Title Agency in Pennsylvania

So you want to start your own title agency?  Great!  You have chosen a rewarding business to launch.  As with any business, there are steps to getting started, some of which are specific to the Commonwealth of Pennsylvania, but applicable to other states as well.  

1) First, learn what requirements are specific to Pennsylvania.  The best resource for these specific requirements is the Pennsylvania Insurance Department website which has great information from getting licensed to getting health insurance coverage.  Take some time to get familiar with the state's website: www.insurance.pa.gov.   In PA, all resident business entities must obtain name approval from the Pennsylvania Insurance Department and then register with the Pennsylvania Department of State. There are links to the forms, such as the Title Insurance Business Entity Application form, information about fees, and documents for download on the state's title insurance business entity information webpage.  

2) Once you have started the application process with the state, it's a great time to get education for your title agent's license.  You can take a prelicensing course through the PLTI.  Our Guidelines for Agent Licensing eBook has practice exams that can help you prepare for the state licensing exam.  Consult the state guidelines, which you will find on the PA State Department of Insurance website.

• The prelicensing course will prepare you for the licensing exam.  Take the time to study the materials and take the practice exams as many times as you want.  Each time the questions and answers will shuffle, so it's a great way to prepare and get used to the exam format.
• In PA there is NO prelicensing education credit requirement for title agent licensing, so you won't have to get any prerequisite credits.  Title is the only insurance line that does NOT require credits before taking the exam.
• Consider joining Pennsylvania Land Title Association (PLTA), the trade association for the title insurance industry in Pennsylvania.  As a member of the PLTA you will have access to benefits including discounts for events and education, including the discounted member rate for the Guidelines for Agent Licensing eBook.  You've already found our website so you are in a great position to join and begin enjoying the benefits.
  

3) Once you are prepared, register with PSI and schedule to take the licensing exam.  Pennsylvania Insurance Department requires that you take and pass the Pennsylvania title agent's licensing exam. PSI Services LLC is a private company contracted by the state to administer the exams.  For more information you can visit PLTI's How to Become a Title Agent webpage for more details.  You will have to create an account on the PSI website and register to take the the licensing exam through one of your state's testing agencies. In Pennsylvania, you will be tested on insurance regulation, general insurance concepts, title insurance principles, title exceptions, procedures for clearing a title, and real estate transactions.  To pass the exam you are required to pass with a grade of 70% or higher.

4) Purchase a professional liability insurance policy. Pennsylvania requires you to have professional liability insurance, also called errors and omissions (E&O) insurance, which protects you and your company if an unintentional error or omission is made in the while providing professional services.

5) Obtain a surety bond. A surety bond guarantees the performance and obligations of the bonded party and ensures they will comply with state laws and regulations. This will ensure that your company can fulfill its obligations to its customers, and that the customers will have the opportunity to get funds back if something should happen to the company. Find a company that specializes in new companies and small businesses or find a broker who can assist you.

6) Obtain a fidelity bond. Fidelity bonds are insurance products that protect employers from losses caused by an employee's fraudulent actions or misconduct.  If an employee in your company were to commit fraud or embezzlement, this bond will protect you as the employer and owner from resulting losses. Contact the Pennsylvania Department of Banking and Securities website for more information.

7) You may want to consult an attorney who specializes in small business. Attorneys can help with determining what type of company to establish: limited liability company, sole proprietorship, corporation, etc.  They can also help navigate state laws about naming and registering your company (see 8 and 9).   An attorney can also assist with drafting articles of organization or articles of incorporation. 

8) Register your company with the state of Pennsylvania.  Visit the Pennsylvania Business One-Stop Shop, a state government office equipped with knowledge, information, and resources to help start a business in PA. A step by step checklist tool is available on the website to customize your steps and an overview of basic business registration is available on the site as well.   In Pennsylvania, you may need to register with several different state agencies which could include: the PA Department of State, PA Department of Revenue, and/or PA Department of Labor and Industry.

9) Determine your business structure. You will need to decide which business structure will best suit your business.  Once you decide, you will need to file articles of organization or articles of incorporation with the Secretary of State. You will also need to choose your business name as you file your business registration and tax forms.  A Fictitious or Business Entity Name Approval Form is available on the Pennsylvania Insurance Department website.  Pennsylvania statute prohibits an agent for a title insurance company from adopting a firm name containing the word "title" (40 P.S. §910-29).  Out-of-state residents whose agency name in their home state includes the word "title" must provide an alternate name that does not contain the word "title" in section 2A of the PA Department of State foreign registration statement.

10) Apply for a Federal EIN online. Apply for your federal business identification or Employer Identification Number through the IRS website.

11) Find office space. You will need a business address before applying for your business license and it must be an address that can be verified. Look for a professional office space in an office building. Try to find something located near other offices you will work with, such as banks, real estate offices, and mortgage companies.  If you plan on running the business out of your home look for more information on the states website. 

12) Find a Title Insurance Underwriter.  Every property transaction you close must be insured by a title insurance underwriter.  You will need to be approved and appointed by an underwriter in Pennsylvania.  The underwriter will require a complete agency application, and may require credit and background checks as well.  Once approved, the underwriter will notify the Pennsylvania Insurance Department and appoint your company as an agent in good standing.  Check our website for a list of PLTA underwriter members and state rep contact information.

13) Hire staff for your agency. As you build your business, you will need to hire staff including: searchers, agents, compliance officers, and office managers. Job postings are available free for PLTA members through our Career Center. 

14) Find vendors to suit your business needs.  Network and search members through the PLTA member database to assist with building your business.  Also, many vendors display at PLTA events giving members the opportunity to ask questions and do research for their business needs.

15) Join the Pennsylvania Land Title Association.  PLTA protects the interests of our members through legislative and judicial advocacy that brings title industry issues to the forefront at the state and national levels.  Become a part of the trade association and begin utilizing the benefits and discounts immediately. Join Today! 

*This information is not legal advice. The Pennsylvania Land Title Association does not render any legal, real estate, accounting or other professional services. For legal advice please consult an attorney.