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Title Insurance Public Hearing on Rates and Practices

The Pennsylvania Insurance Department held a public informational hearing on title insurance issues on Thursday, May 28, 2009. 
Links of Interest: 
Below you may view testimony that was presented, as well as additional public comments received by individuals who did not offer testimony at the hearing. You may also view the transcript from the hearing in its entirety. 
Testimony from the hearing (in alphabetical order):
Other submitted comments (in alphabetical order):
The purpose of the public informational hearing on title insurance was to consider the full scope of issues currently under consideration within the department, including the public policy issues raised by the current rating system and market practices such as how rates are implemented by companies and agents, compensation to title agents, the use of affiliated business arrangements, and the payment of compensation or profit-sharing based on the referral of business. Additional focus will be given to recent comments by the Pennsylvania Office of Attorney General and broader reform proposals suggesting that economic trends, changes in the financial services industry, and technological changes create opportunities for new efficiencies in the title business.  The department requests information and testimony on the following topics (this list is not exclusive):
  • The premiums charged by title insurance companies, the commissions or fees paid to or charged by title agents and approved attorneys and the effect such premiums, commissions and fees have on the overall cost to consumers; 
  • The cost to title insurance companies to insure against defects in title and the cost to title insurers or agents to perform the necessary title searches, to prepare a title abstract, to clear defects in title and to perform a real estate closing; 
  • The current availability and viability of computerized title records searches and any current or projected impact electronic searches may have on the cost of performing title searches; 
  • The current compensation structure to title agents, including the use of affiliated business arrangements, the payment of compensation or profit-sharing based on the referral of business, and the effect these practices have on consumers and on competition in the marketplace; 
  • The differences between a policy issued upon the sale of a home versus the refinancing of a home loan and how this should be reflected in the rating structure; 
  • The appropriateness of charges for services ancillary to a real estate closing; 
  • What is a reasonable rate of return for title insurance companies under current economic conditions;
  • The impact of the current real estate market on the solvency of title insurance companies and the possible impact on consumers given the absence of guarantee fund coverage
  • Whether current economic trends and changes in the financial services market create opportunities for new efficiencies.