REQUIREMENTS TAILORED TO TITLE INSURANCE IN YOUR REAL ESTATE TRANSACTIONS

In late 2023, title insurers were informed that we would be subject to PCMLTFA reporting requirements. Since then, we have worked collaboratively with the Department of Finance and the Financial Transactions and Reports Analysis Centre (FINTRAC) to highlight the nuanced and unique business relationship between title insurers, lawyers and their respective owner-purchaser clients (insureds). We have done this to:

1. alleviate concerns which may be raised by lawyers in terms of client confidentiality, solicitor-client privilege, and reporting requirements; and
2. minimize the impact of these requirements on the way real estate transactions are undertaken, specifically where title insurance is sought.

These collaborations have resulted in record keeping and reporting requirements that are specifically designed for the title insurance industry. These reporting obligations will include collection of certain know-your-client (KYC) information from lawyers as it relates to the insureds before issuing an owner’s title policy.

LAWYER’S ROLE AS AN AGENT

We have made every effort to minimize the impact on the title insurance ordering and real estate closing process. FINTRAC has permitted the use of an agent for KYC purposes recognizing that lawyers interact directly with insureds versus title insurers. Accordingly, the required information can be obtained by title insurers through lawyers without contacting the insureds directly. This will, however, require that the title insurer and lawyer enter into an agency agreement.

As for KYC data inputs, the information required for ID verification through FINTRAC largely mirrors professional responsibility requirements. Required data inputs include the purchaser/insured’s name, type of ID document (including additional information from the ID) or confirmation of legal existence in the case of entities, and jurisdiction and country of the ID document.

TITLE INSURER RECORD KEEPING OBLIGATIONS

Most record-keeping data have likely already been provided by the insureds to other parties in the real estate lifecycle, such as lenders, land registry offices, mortgage brokers, realtors, and title insurers (during the title insurance ordering process).

Title insurers are aware of the 2015 Supreme Court decision, which upheld solicitor-client privilege in the context of attempts to regulate by FINTRAC. We have kept this Supreme Court decision at the forefront of our discussions with regulatory authorities.

NOTICES FROM PROFESSIONAL BODIES

Professional bodies, such as law societies, may issue notices to the profession focusing on (1) ensuring that lawyers have obtained the proper consents from their clients, and (2) the difference between solicitor-client privilege and confidential client information.

KEY TAKEAWAYS

1. The establishment of a KYC agency relationship, in writing, between title insurers and lawyers as their agents.
2. Acting as an agent under such an agreement to provide confidential information about the insured, verification of their identity and their real estate transaction does not create a solicitor-client relationship between the lawyer and the title insurer, as these are not legal services.
3. Lawyers should obtain the insured’s voluntary and informed consent in order to provide client-confidential information pursuant to the agency relationship with the title insurer.
4. As title insurers, we are more than happy to work with lawyers on establishing an appropriate standard consent request which can be used between the lawyer and the insured moving forward as of October 1, 2025.

NEXT STEPS

Lawyers are the pathway to our insureds. It is in our best interests to ensure that we align with our lawyers and insureds to maintain a seamless title insurance issuing process and minimize the impact on real estate closings. We are committed to combatting title fraud and protecting the constitutional principles highlighted in the 2015 Supreme Court decision.

Further information about the KYC agency arrangement and the new data requirements will follow in the coming weeks.