BILL NUMBER:S812

TITLE  OF BILL:  An act in relation to directing the superintendent of
financial services to conduct a study and  issue  a  report  regarding
title insurance premium rates

PURPOSE OR GENERAL IDEA OF BILL:

It  authorizes  the  state  superintendent  of  financial  services to
conduct a study and make recommendations on  title  insurance  premium
rates in New York State.

SUMMARY OF SPECIFIC PROVISIONS:

Section  1.1:  The  superintendent  of  financial  services  is hereby
authorized and directed to conduct  a  comprehensive  study  on  title
insurance  programs. The workers' compensation law is amended to add a
new subdivision 6.

Section 1.2: Within a year of  the  effective  date  of  the  act  the
superintendent   shall   issue  a  report  to  the  governor  and  the
legislature that shall include but not be limited to a.)  an  analysis
of  title  insurance premiums in New York State; b.) steps that can be
taken to reduce such rates; and c.) what service charges are regularly
added to customers' bills for title services.

              

JUSTIFICATION:

Title insurance guarantees homebuyers against claims  of  prior  liens
against  property  they  intend  to  purchase.  Like  other  forms  of
insurance, it  is  regulated  by  New  York  State.  currently,  title
insurance  is  available  only  through  private  entities  and  costs
citizens an average of $1.2 billion, in order to guarantee payments of
$50 million, according to 2007 statistics. Because title insurance  is
a requirement of home purchase, citizens must accept the prices set by
private  industry, but that require the approval of the New York State
Insurance Department. New York State should take a greater interest in
protecting citizens  from  the  overpricing  of  something  the  state
requires of home buyers. For example, the State of Iowa has prohibited
the  private  sale  of title insurance, allowing the government to set
rates and ensure that its citizens are offered standard price. A study
of current, private title  insurance  pricing  will  allow  the  State
superintendent   of   financial   services  to  properly  assess  what
appropriate rates for title insurance should be according to both  the
market and the actual costs of insuring title.

PRIOR LEGISLATIVE HISTORY:

S.6289 2010: Held in Insurance Committee
S.3571 2011: Held in Insurance Committee

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:


This act shall take effect immediately.