NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS
Title Guaranty Fund Update: The Title Insurance Task Force met recently by teleconference and received an update on the activities of the Title Insurance Guaranty Fund Working Group. The draft “Title Insurance Guaranty Association-Title Insurance Consumer Protection Fund Guideline” was revised and adopted by the Working Group prior to the Task Force meeting. The Task Force voted to expose the Guideline for comments, which are due on March 20. The Guideline and any comments received by then will be discussed at the March 29 Task Force meeting during the NAIC Spring National Meeting in Phoenix, Arizona.
Title Insurer Insolvency Assessment Legislation Introduced: Senate bill no. 1136 was introduced to amend a statute enacted in 2011 which provided that title insurers doing business in Florida are liable for assessments to pay the expenses of administering and settling claims for title insurers in rehabilitation/receivership. The statute also authorized recoupment of the assessments by surcharges placed on title insurance policies. Since 2011, there have been two assessments levied against title insurers doing business in the state and corresponding surcharges paid by consumers. Application of the 2011 law has led to a situation where more consumers than necessary will wind up paying surcharges to recoup the assessments. SB 1136 authorizes the Office of Insurance Regulation to use excess surcharges collected by insurers to reduce future assessments and surcharges. The bill also accelerates the collection of surcharges by title insurers to reduce the number of policyholders subject to the surcharge over time. SB 1136 has been referred to the Banking and Insurance and Appropriations Committees.
Legislation to Reform Estoppel Certificates Advances: House bill no. 611 amends the Real and Personal Property Law to: (i) provide for the standardization of information in estoppel certificates issued by a homeowners, cooperative and condominium associations; (ii) reduce the time that an association has to respond to a request for the issuance of an estoppel certificate; (iii) specify that an estoppel certificate may be delivered by mail, hand, or electronically; (iv) establish maximum fees an association may charge for the issuance of an estoppel certificate; (v) provide that an association waives the right to collect moneys owed if such moneys are not stated in the estoppel certificate or if the association fails to issue the certificate; and (vi) provide that if the estoppel certificate is requested in conjunction with the sale or refinancing of a unit, any fees shall be payable no earlier than the date of the closing of the transaction and shall be paid from the settlement proceeds. HB 611 has been favorably reported out of the Civil Justice Subcommittee and is currently with the Business and Professions Subcommittee.
Cyber Security Report Outlines Forthcoming Changes to DFS Examinations: The Department of Financial Services (“DFS”) recently released its “Report on Cyber Security in the Insurance Sector” (the “Report”). The Report summarized the findings of a DFS cybersecurity survey conducted from 2013 to 2014 and drew responses from 43 insurers regarding their information security framework; the budget and costs associated with cybersecurity; corporate governance around cybersecurity; and their cybersecurity plans. In addition to examining the cybersecurity programs of the insurers who participated in the survey, the DFS reviewed the enterprise risk management reports that insurers are statutorily required to file with the DFS by April 30 annually. These reports informed the DFS's understanding of how cybersecurity fits into an insurer's overall risk management strategy. The DFS has stated that it will integrate regular, targeted assessments of cybersecurity preparedness at insurance companies as part of its examination process; put forward enhanced regulations requiring institutions to meet heightened standards for cybersecurity; and examine stronger measures related to the representations and warranties insurance companies receive from third-party vendors, among other measures.
Legislation Affects Actuarial Certification of Reserves: Senate bill no. 646 was introduced, amending the Insurance Code to remove the requirement that an actuarial certification of title insurer reserves include adverse development of known claims. The change applies to annual statements of title insurers and would become effective for annual statements filed after January 1, 2016. SB 646 has been referred to the Committee on Business and Commerce.
Title Insurance Market Study Legislation Introduced. House bill no. 223 has been introduced and directs the Commissioner of Insurance to undertake a study of title insurance in Vermont. The legislation requires the Commissioner to make findings regarding the industry in the state, including whether a competitive market place for title insurance exists in the state and whether additional state regulation would benefit consumers. H.223 has been referred to the House Committee on Commerce and Economic Development.