NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS

Title Insurance Task Force To Survey Affiliated Business Arrangements: The Title Insurance Task Force (the “Task Force”) recently conducted a conference call and among the agenda items discussed by the Task Force was an update to the 2010 “Survey of State Insurance Laws Regarding Title Data and Title Matters.”  Nebraska Insurance Department Director Bruce Ramge, chair of the Task Force, recommended the updated version of the survey include information on state requirements applicable to affiliated business arrangements (“ABA”).  Task Force members were asked to submit ABA related questions to be considered for inclusion in the survey.  Potential ABA survey topics discussed included whether states had any restrictions on ABAs, the extent of disclosures ABAs are required to make and limits on business activities.

ALABAMA

Legislation To Exempt Attorneys from Licensing As Title Agents Introduced: Senate bill 456 has been introduced which would amend current law requiring attorneys practicing in Alabama who serve as agents for a title insurance companies to be licensed by the Alabama Insurance Department. The bill, if enacted, would exclude from the definition of “title agent” attorneys licensed by the Alabama State Bar. SB 456 has been referred to the Senate Committee on Banking and Insurance.

FLORIDA

Proposed New Rule on Unlawful Inducements: The Florida Department of Financial Services (the “FDFS”) recently published a Notice of Development of Rulemaking relating to the identification of unfair methods of competition and unfair or deceptive acts or practices in the transaction of title insurance.  The proposed Rule 69B-186.010 lists numerous activities the FDFS considers to be unlawful inducements for the sale, placement or referral of title insurance business, including, among others, facilitating discounts in the costs of inspection reports, appraisals or surveys to purchasers or prospective purchasers of title insurance, providing memberships in certain organizations at a reduced or no cost to an interested party (as defined in the Rule), and making or offering to make charitable or other tax-deductible contributions on behalf of a purchaser or prospective purchaser of title insurance.  If requested and not deemed unnecessary by FDFS, a rule development workshop will be scheduled on June 9 in Tallahassee.

NEW YORK

Proposed New Regulation on Title Insurance Rates, Expenses and Charges: The New York State Department of Financial Services (the “NYSDFS”) published proposed new Regulation 208 (11 NYCRR Part 227) in the State Register on May 6.  Regulation 208 delineates certain expenditures, including meals, entertainment, travel and sponsorships, among others, that are prohibited under the New York Insurance Law when provided by title insurance corporations or title insurance agents to “current or prospective customers” (as defined in the regulation) as an inducement for title insurance business.  The regulation provides that prohibited expenditures may not be part of any rate filing, purportedly to ensure that such expenditures do not contribute to “excessive” rates. Title insurance corporations and title insurance agents must provide, in response to the annual data call, an affirmation that no expense schedule submitted in connection with the data call includes any prohibited expenditure. If any schedules submitted in response to the data call for the most recent 10-year period preceding the effective date of the regulation included prohibited expenditures, the schedule would have to be restated and resubmitted within 60 days of the regulation’s effective date.  Regulation 208 also sets caps on fees for ancillary charges, which are not included in the title insurance premium, such as Patriot, bankruptcy and municipal searches.  The regulation is currently subject to a 45 day public comment period prior to its revision or adoption by the NYSDFS.