Missouri Hits Two Title Insurers with Fines, Alleges Lack of Agency Oversight
The Missouri Department of Insurance, Financial Institutions and Professional Registration said Thursday that it has ordered two title insurance companies to pay over $240,000 in fines and to fix current title agency rating procedures. The state regulator said that an investigation indicated St. Louis-based Land Title Insurance Company and Calif.-based First American Title Insurance Company allowed independent title agencies writing title insurance on their behalf to use incorrect risk rates or risk rates not filed with the department. Risk rates are used in calculating the premium a consumer will pay for the cost of title insurance. â€œThe new title insurance reforms I signed provide for better disclosure to consumers and more accountability to companies and agencies to ensure they give Missourians consistent and fair prices for title insurance,â€? Missouri Gov. Matt Blunt said. â€œThe results of these examinations demonstrate the importance of new laws Gov. Matt Blunt signed last year,â€? DIFP director Douglas Ommen said. â€œMissouri consumers deserve to be treated fairly and honestly during the home-buying process. Title agencies should not use varying rates or rates not filed with this department, and title companies should do a better job of overseeing the transactions of agencies that work on their behalf.â€? Gov. Matt Blunt signed title insurance reform legislation that became effective with the new year. It clarifies a duty to fully disclose to consumers separate price information for insurance premium and for the title search and other services, and it requires title insurance companies to actively oversee title agencies writing business on their behalf by conducting annual audits of escrow, underwriting and claims practices. In the fall of 2006, the department began a series of on-site investigations of title insurance agencies in an effort to review the marketplace and see how the title industry was marketing, underwriting and rating insurance coverage in the St. Louis area. For more information, visit the DIFP Web site. Disclosure: As of posting date, the author held no positions in the companies mentioned in this story.