FOR IMMEDIATE RELEASE
TITLE INSURANCE PRACTICES ARE FOCUS OF NOV. 3 PUBLIC HEARING
Superintendent of Insurance Howard Mills today announced that the New York State Insurance Department will conduct on Friday, Nov. 3, 2006 a public hearing on the states title insurance industry practices. The hearing gets underway at 10 a.m. and will be held at the Insurance Departments office in lower Manhattan, 25 Beaver Street5th Floor Hearing Room.
"Title insurance protects homeowners from future claims made against their property but consumers are often unaware of the different fees and charges that comprise their title insurance payment," Superintendent Mills stated. The hearing will consider issues arising in the wake of the recent agreements the Insurance Department announced with the New York Attorney General's Office in May 2006 following a regulatory investigation of the title industry. The hearing will explore the following topics, among others:
- The cost to the title insurance company/title agents to perform the necessary searches of pertinent records compared with the premium rates charged;
- The premiums paid to title insurance companies, the commissions or fees paid to title agents/attorney agents and the effect such premiums, commissions and fees have on the overall cost to consumers;
- The rationale for the existence of two rate tiers within the state based on where a property is situated, and whether that current system should continue;
- The effect on the consumer of the current compensation structure, including affiliated business arrangements and referral fees; and
- Whether different rates should be charged for residential and commercial properties.
Title insurance protects the buyer and the mortgage holder in a real estate transaction by ensuring that the seller has legal title to the subject property. A title search is performed by the title insurance company, title insurance agent, or an attorney prior to the closing. This search will reveal whether any liens or claims are pending against the property and ascertain whether the seller has clear title to the property being offered to a prospective buyer.
The New York State Insurance Department approved 15 percent title insurance rate reductions in June 2006 for the five largest title insurers in the state by market share, representing 93 percent of the title insurance premiums.
Those interested in testifying at the Friday, Nov. 3, 2006 public hearing should register in advance by contacting Ms. Ellen Wenz, Public Affairs Bureau, New York State Insurance Department, 25 Beaver Street-3rd Floor, New York, NY 10004. Those persons who cannot attend but would like to submit written comments should address them to Ms. Ellen Wenz, at the above address. Written comments will be accepted and incorporated into the official record for 30 days thereafter.
For further information on the hearing, please contact the Insurance Departments Public Affairs Office at 212-480-5262.