An Overview of An Overview of Title Insurance Title Insurance Regulation Regulation Steve Parton Steve Parton General Counsel General Counsel Florida Office of Insurance Florida Office of Insurance Regulation Regulation June 4, 2009 June 4, 2009 Title Insurance Advisory Study Council Tallahassee, Florida
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An Overview of Title Insurance Regulation Steve Parton General Counsel Florida Office of Insurance Regulation June 4, 2009 Title Insurance Advisory Study.
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An Overview of An Overview of Title Insurance RegulationTitle Insurance Regulation
Steve PartonSteve PartonGeneral CounselGeneral Counsel
Florida Office of Insurance RegulationFlorida Office of Insurance RegulationJune 4, 2009June 4, 2009
Title Insurance Advisory Study Council
Tallahassee, Florida
Overview of PresentationOverview of Presentation
Overview of Regulatory StructureOverview of Regulatory Structure
Regulatory ObstaclesRegulatory Obstacles
Strategies to Improve RegulationStrategies to Improve Regulation
Section 20.121(5), F.S. – “Effective January 7, 2003, the rules of …Section 20.121(5), F.S. – “Effective January 7, 2003, the rules of …the Department of Insurance that were in effect on January 6, the Department of Insurance that were in effect on January 6, 2003, shall become rules of … the Financial Services Commission 2003, shall become rules of … the Financial Services Commission … and shall remain in effect until specifically amended or repealed … and shall remain in effect until specifically amended or repealed in the manner provided by law.”in the manner provided by law.”
* * Since 2003 Title Insurance Agents have been regulated by the Since 2003 Title Insurance Agents have been regulated by the Department of Financial Services.Department of Financial Services.
Regulatory IssuesRegulatory Issues
1) Non-Rule Policy1) Non-Rule Policy
2) Regulatory Scheme2) Regulatory Scheme
Question 1Question 1
Industry*:Industry*: “Must a title agency charge reissue “Must a title agency charge reissue rates, rather than original rates, if a previous rates, rather than original rates, if a previous owner’s policy … is presented … prior to owner’s policy … is presented … prior to closing?”closing?”
DOI**:DOI**: “A title insurance agency must charge “A title insurance agency must charge reissue rates …”reissue rates …”
*Excerpted from title insurer letter dated August 21, 2000
** Excerpted from DOI response dated September 6, 2000
Question 2Question 2
Industry*:Industry*: “Assuming the reissue rate is “Assuming the reissue rate is required … may the issuing agency required … may the issuing agency nonetheless charge more than the reissue nonetheless charge more than the reissue rate … ?”rate … ?”
DOI**:DOI**: “Yes, but disclosure is required”“Yes, but disclosure is required”
*Excerpted from title insurer letter dated August 21, 2000
** Excerpted from DOI response dated September 6, 2000
Question 3Question 3
Industry*:Industry*: “May an agency remit to its “May an agency remit to its underwriter based on reissue rates even if the underwriter based on reissue rates even if the agency charges the consumer original rates agency charges the consumer original rates …?”…?”
DOI**:DOI**: “Yes, if the reissue rate applies and is “Yes, if the reissue rate applies and is disclosed on the closing statement.”disclosed on the closing statement.”
*Excerpted from title insurer letter dated August 21, 2000
** Excerpted from DOI response dated September 6, 2000
Question 4:Question 4:
Industry*:Industry*: “May an agency charge more than “May an agency charge more than the promulgated rate for an original owners or the promulgated rate for an original owners or loan policy, if he discloses the promulgated loan policy, if he discloses the promulgated rate on the settlement statement?”rate on the settlement statement?”
DOI**:DOI**: “Yes; disclosure of the risk premium is “Yes; disclosure of the risk premium is required.”required.”
*Excerpted from title insurer letter dated August 21, 2000
** Excerpted from DOI response dated September 6, 2000
Double Charging for Examination Services:Double Charging for Examination Services:
OIR Counsel:OIR Counsel: Why were the people of Florida paying Why were the people of Florida paying twice for an examination in this time period?twice for an examination in this time period?
VP of Title Insurer:VP of Title Insurer: That was the law. That was the law.
Excerpted from testimony during the Title Insurance Regulation Hearing; August, 2007.
Circumventing Statutory Law Limiting Fees:Circumventing Statutory Law Limiting Fees:
Title Insurer Bulletin to Agents:Title Insurer Bulletin to Agents:
“…“…since there will be no regulatory cap on what can be since there will be no regulatory cap on what can be charged for other Closing Services, our recommendation charged for other Closing Services, our recommendation is NOT to charge an “examination fee” styled as such.”is NOT to charge an “examination fee” styled as such.”
Excerpted from “Confidential Bulletin” of a prominent title insurer in Florida dated August 20, 2007.
Attempted Rate RevisionsAttempted Rate Revisions
1992 – Nelson Lipshutz’s “Report on Rates”1992 – Nelson Lipshutz’s “Report on Rates”
1996 – DOI Data Call1996 – DOI Data Call
1999 – David Cox’s “Report on Rates”1999 – David Cox’s “Report on Rates”