December 5, 2012



Aaron Day
Director of Government Affairs and Counsel
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TLTA Requests Rate Hearing
TLTA, TDI Staff and OPIC Jointly Agree on Rate Recommendation for Commissioner
Last week, TLTA filed a petition with TDI requesting a rate hearing. In September of this year, TLTA submitted a proposal to the Texas Department of Insurance (TDI) for an increase in the Basic Premium Rate for Title Insurance. Since that time, a team made up of TLTA Officers, staff, legal counsel and experts has been participating in a series of informal public meetings with staff from TDI and the Office of Public Insurance Counsel (OPIC) to discuss our request for a rate increase.

Discussions have included analysis of our initial recommendation by TDI’s and OPIC’s actuaries and experts as well as discussion and presentation of their alternative rate proposals. As a reminder, this is part of the new rate making process in keeping with statutory changes we supported in the last Legislative Session.

In the last informal meeting, the three parties were able to reach a joint agreement on a specific rate recommendation to be considered by the Commissioner of Insurance in a public hearing. The agreed upon recommendation for a 3.8% increase takes into consideration rate change recommendations presented by each of the three groups.

It is very important to note that this agreement between the three parties has only been made with the staff from TDI who have been tasked with making a recommendation to the Commissioner. This joint recommendation will not be considered or ruled upon by Commissioner Eleanor Kitzman herself until an actual hearing is held.

Therefore, TLTA has formally asked that a hearing be scheduled so that the Commissioner can consider the joint recommendation and make a final rate ruling. The joint recommendation to the Commissioner will be presented at the hearing by the three parties. We anticipate, based on the tentative schedule outlined by the groups, that a hearing will be held sometime in February.


NAIC Fall Meetings Focus on Escrow Theft, Lender Vetting
Jim Hyland | TLTA Federal Legislative Counsel
The National Association of Insurance Commissioners (NAIC) met last week outside of Washington, D.C. TLTA's counsel in Washington, D.C., Jim Hyland, attended the Title Insurance sections on behalf of TLTA.

Of interest to the Commissioners in attendance was the issue of "escrow theft." In response to the concerns of the Commissioners, the American Land Title Association (ALTA) made a presentation to the NAIC Market Conduct and Mortgage Fraud Working Group on the Title and Settlement Company Best Practices they are in the process of developing. The working group is currently Chaired by the Insurance Commissioner in Indiana.

ALTA explained that their Best Practices will be voluntary and are designed to help foster a positive real estate settlement experience. The presentation was well received by the Commissioners, and they indicated that they appreciated the industry's attempt to provide title and settlement agents, lenders, regulators and the public with a benchmark for the practices. Two of the Commissioners had specific questions. One question concerned the diligence of the title industry in delivering clear title as opposed to "insuring over" potential title defects. 

Another Commissioner inquired about the recent CFPB Bulletin on proper vetting of third party vendors. ALTA responded that the CFPB has made it clear it did not intend this memo to be directed at settlement agents. ALTA also discussed the title industry's concerns with the potential cost of these services and the need for them given the comprehensive application that agents complete when signing up with an underwriter. Also supporting the ALTA Best Practices at the meeting was a senior representative from Wells Fargo. Responding to the issue of third party vetting companies, she posed the question, "who will be vetting the vetters?" The NAIC will continue to review the issue of escrow theft and is preparing a white paper on this matter.

Of additional interest to our industry, the Financial Crimes Enforcement Network (FINCEN), an agency in the U.S. Department of the Treasury charged with enforcement of money laundering activities, is actively considering having title insurers submit Suspicious Activity Reports (SARs) similar to what banks are already required to do. FINCEN made a brief presentation on this issue at NAIC. SARs include detailed information about transactions that are or appear to be suspicious. The goal of SAR filings is to help the federal government identify individuals, groups and organizations involved in fraud, terrorist financing, money laundering and other crimes. Any work on this is in the early stages and TLTA will continue to monitor developments in this area.

TLTA will also continue to monitor the work of the NAIC. Their next quarterly meeting will be held in April in Houston and TLTA staff and representatives will be in attendance.


Dallas' Jeb Hensarling to Chair U.S. House Financial Services Committee
Credit Union Times | November 28, 2012
Rep. Jeb Hensarling (R-Texas), the heir apparent to chair the House Financial Services Committee, was approved for the post by House Republican leadership and could be confirmed this week. Hensarling has been the frontrunner for months to take over the post in 2013 from Rep. Spencer Bachus (R-Ala.), who has served the maximum six years allowed under party rules as either chairman or ranking minority member." Read More »

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Texas Land Title Association
1717 W. 6th St.
Austin, TX 78703
Phone 512.472.6593
FAX 512.472.5931

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