NY title insurance has been impacted by the induction of Regulations 206 and 208, which were initially announced by Governor Andrew M. Cuomo in the spring of 2017
Regulations 206 and 208 were proposed within NY title insurance due to a belief of corrupt industry practices.
The original release from the governor’s office states, “These new protections were drafted following an investigation by the state Department of Financial Services that revealed that title insurance companies and agents have spent millions of dollars on inducements, which the industry has charged back to consumers as ‘marketing costs’.”
In terms of Regulations 206 and 208, “The first proposed regulation clarifies the rules about expenses such as meals and entertainment, and ancillary fees that title agents or title insurers may charge. The second proposed regulation requires title insurance companies or agents that generate a portion of their business from affiliates to function separately and independently from any affiliate and obtain business from other sources.”
Ultimately these regulations were approved, but there has been opposition and delays along the way.
NY title insurance regulations slowed due to lawmaker concerns
At the end of 2017 the New York Law Journal reported that lawmakers had asked the regulator for a six-month delay for the regulations. Assemblyman Kevin Cahill, D-Kingston, had this to say in regards to the delay, which was approved from the original start date of Dec. 18, 2017 to Feb. 1, 2018.
“An additional 45 days will allow title insurance companies and agents more time to receive guidance and clarity from the department. During this period the Legislature will continue to review concerns as well as ensure that the department has worked within its authority. Many responsible parties associated with title insurance raised serious issues with compliance and disruption of an important industry in New York. That is why I asked for the reprieve. I applaud Superintendent Vullo for acting decisively in the face of those concerns.”
NY title insurance regulations: Where they came from and the argument against them
The Real Deal provided some information from the testimony given by Maria Vullo, superintendent of the state’s Department of Financial Services, at the January 12, 2018 hearing in Albany. “According to Vullo’s testimony, title insurers wrote $1.1 billion in premiums in New York in 2016. That represented nearly 10 percent of market nationally, which had $11.7 billion in premiums that year, she said. That’s partly because rates are significantly higher in New York — about 40 percent more than Connecticut and 25 percent more than Massachusetts and New Jersey.”
This was disputed by major industry insurers at First American Title Insurance, Stewart Title Insurance Company, and Fidelity National Title Group. These industry representatives say that these regulations are unclear, anti-competitive, would threaten the integrity of the industry, and lead to job losses for professionals and higher costs for consumers. Many of the practices in question are considered to be reasonable and effective ways of marketing.
If you want the latest information from the title insurance industry then sign up for our mailing list at our website today. If you want the best title insurance career opportunities available to you, then get in touch with us today.
Resources for this article on NY title insurance: