Title Insurance Issues (C) Working Group
Property and Casualty (C) Committee

The Title Insurance Working Group will study issues related to title insurers and title insurance producers, including the impact of current real estate settlement practices on policyholders, recognizing that typically, settlement providers, not policyholders, are the title entity's customers.

The working group should  

• Study whether the title insurance industry is undertaking additional financial risks at the request of institutional lenders and owners;

• Study the issuance of mortgage impairment products by non-title insurers to determine whether they should be classified as title insurance;

• Monitor the developments of the U.S. Department of Housing and Urban Development (HUD) proposed changes to its Real Estate Settlement Procedures Act (RESPA) and provide comments to HUD or to the U.S. Congress if necessary;

• Review the Title Insurers Model Act, which was last adopted in 1995 and has not been revised since that time. Consider issues submitted by consumer representatives during the review, including: whether monoline laws and regulations needlessly diminish competition; whether greater price competition among title insurers can be encouraged; whether prices should be reduced for refinances; whether fee padding and charging consumers fees for third party services that the title insurers are actually getting free or at a much lower cost is detrimental to consumers; and whether the new trend of realtors including provisions in their contracts to sell requiring the buyer to utilize a particular title entity is appropriate;

• Study captive reinsurance arrangements that title insurers maintain and determine if they are legitimate reinsurance transactions or simply gimmicks to avoid the application of laws that would prohibit rebating, and, if necessary, make recommendations for needed reform;

• Study affiliated business arrangements (ownership arrangements between and among settlement providers and title entities) to determine what types of arrangements are legitimate and what types of arrangements are “shams”, i.e., those structured mainly to capture referral business and provide kickbacks to settlement providers, and that do not perform essential core title services;

• Study the appropriateness of title insurance rates in light of the current competitive environment, and in particular, determine what constitutes appropriate justification for rates, determine the affect affiliated business arrangements should have on rates, and determine the feasibility of interactive rate comparisons among title entities to enhance competition.