NY State Senate Bill 2019-S8340

Senate Bill S8340

2019-2020 Legislative Session

Relates to mandating transparency of the expenses of title insurance corporations and authorizing the department of financial services to lower title insurance rates

download bill text pdf

Archive: Last Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 15, 2020	referred to insurance

2019-S8340 (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§6403 & 2321, Ins L
Versions Introduced in Other Legislative Sessions:: 2021-2022: S464
2023-2024: S4357

2019-S8340 (ACTIVE) - Summary

Mandates transparency of the expenses of title insurance corporations, including marketing expenses, lobbying expenses, salaries and other forms of compensation and authorizes the department of financial services to lower title insurance rates if deemed excessive.

2019-S8340 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S8340

SPONSOR: BIAGGI
 
TITLE OF BILL:

An act to amend the insurance law, in relation to mandating transparency
of the expenses of title insurance corporations and authorizing the
department of financial services to lower title insurance rates

 
PURPOSE OR GENERAL E OF BILL:

The purpose of this bill is to increase transparency around title insur-
ance companies expenses and authorize the Department of Finance to lower
excessive insurance rates.

 
SUMMARY OF PROVISIONS:

Section 1 adds a new subsection (d) to section 6403 of the insurance
law. This subsection requires title insurance corporations to file a
detailed annual financial statement including expenses for items such as
marketing, lobbying expenses, employee salaries and other forms of

compensation with the superintendent and public. The superintendent
shall make such information available to the public in both written and
electronic form.

Section 2 amends subsection (b) of section 2321 by adding a new para-
graph to allow the superintendent to order a rate filling deemed exces-
sive to be withdrawn and the rate suspended prospectively upon fifteen
days prior notice to the organization or insurer which filed them.

Section 3 provides the effective date.

 
JUSTIFICATION:

Title insurance companies have long engaged in unrestrained spending
practices which they pass onto consumers in the form of higher premiums.
Title Insurance companies spend millions on meals, events, trips, and
other extravagances while trying to secure business from real estate
agents and lawyers. The industry refers to these practices as "marketing
expenses," and includes them in the calculation of future rates, ulti-
mately passing them off to unsuspecting consumers.

Homebuyers already face numerous costs when closing their sale. Title
insurance premiums which can amount to thousands of dollars add on to
those closing costs. Moreover, the industry is dominated by only a few
companies, and has few incentives to offer competitive rates.  This bill
would increase transparency about the spending practices of title insur-
ance companies to disincentivize companies from providing kickbacks to
real estate agents in exchange for business.  Additionally, it empowers
the Department of Financial Services to reduce title insurance rates, by
allowing the Commissioner to order the withdrawal of excessive rate
filings and their suspension until an appropriate rate is provided.
These changes build on the Title Insurance regulations promulgated in
2017 to regulate expenses.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
This act shall take effect on the first of January next succeeding the
date upon which it shall have become a law.

2019-S8340 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8340
 
                             I N  S E N A T E
 
                               May 15, 2020
                                ___________
 
 Introduced  by  Sen.  BIAGGI -- read twice and ordered printed, and when
   printed to be committed to the Committee on Insurance
 
 AN ACT to amend the insurance law, in relation to mandating transparency
   of the expenses of title insurance corporations  and  authorizing  the
   department of financial services to lower title insurance rates

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 6403 of the insurance law is amended  by  adding  a
 new subsection (d) to read as follows:
   (D)  (1)  ON OR BEFORE APRIL FIRST OF EACH YEAR, EVERY TITLE INSURANCE
 CORPORATION SHALL, FOR THE PRIOR CALENDAR YEAR, PROVIDE THE  SUPERINTEN-
 DENT  AND  THE  PUBLIC WITH A DETAILED FINANCIAL STATEMENT TO SUPPLEMENT
 AND EXPAND UPON ANY OTHER INFORMATION OTHERWISE PROVIDED TO THE  DEPART-
 MENT  AS IT RELATES TO SUCH TITLE INSURANCE CORPORATION'S EXPENSES. SUCH
 EXPENSES SHALL INCLUDE, BUT  NOT  BE  LIMITED  TO,  MARKETING  EXPENSES,
 LOBBYING  EXPENSES,  SALARIES  OF  EMPLOYEES, AND ANY OTHER EXPENSES AND
 FORMS OF COMPENSATION.
   (2) THE SUPERINTENDENT SHALL, IN BOTH WRITTEN FORM AND AS PART OF  THE
 DEPARTMENT'S  WEBSITE,  MAKE  SUCH FINANCIAL STATEMENTS AVAILABLE TO THE
 PUBLIC. NO PERSON SHALL BE REQUIRED TO FILE A REQUEST FOR SUCH FINANCIAL
 STATEMENTS PURSUANT TO ARTICLE SIX OF THE PUBLIC OFFICERS LAW  IN  ORDER
 TO  RECEIVE  A COPY THEREOF, BUT UPON REQUEST AND PAYMENT OF THE FEE FOR
 COPYING SUCH DOCUMENT, IT SHALL BE PROVIDED IN  A  TIMELY  MANNER.  WITH
 RESPECT TO THE ELECTRONIC COPY OF SUCH FINANCIAL STATEMENTS, WHICH SHALL
 BE  ACCESSIBLE  ON  THE DEPARTMENT'S WEBSITE, THE DEPARTMENT SHALL HIGH-
 LIGHT THE AVAILABILITY OF SUCH INFORMATION TO THE PUBLIC ON SUCH WEBSITE
 AND THE LINK TO EACH TITLE INSURANCE CORPORATION'S  FINANCIAL  STATEMENT
 SHALL BE ACCESSIBLE IN A SIMPLE AND EASY MANNER.
   (3) THE SUPERINTENDENT MAY PROMULGATE SUCH RULES AND REGULATIONS HE OR
 SHE  DEEMS  NECESSARY FOR THE PROPER ADMINISTRATION OF THE PROVISIONS OF
 THIS SECTION, AND SUCH RULES AND REGULATIONS MAY BE  PROMULGATED  ON  AN
 EMERGENCY  BASIS IF THE SUPERINTENDENT WARRANTS SUCH ACTION TO BE NECES-
 SARY.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD15495-01-0

 S. 8340                             2
 
   § 2. Subsection (b) of section 2321 of the insurance law is amended by
 adding a new paragraph 3 to read as follows:
   (3)  NOTWITHSTANDING PARAGRAPHS ONE AND TWO OF THIS SUBSECTION, IF THE
 SUPERINTENDENT FINDS ANY TITLE INSURANCE RATE FILING  TO  BE  EXCESSIVE,
 THE SUPERINTENDENT MAY ORDER THE FILING WITHDRAWN AND THE RATE SUSPENDED
 PROSPECTIVELY UPON FIFTEEN DAYS PRIOR WRITTEN NOTICE TO THE RATE SERVICE
 ORGANIZATION  OR  TO  THE  INSURER  WHICH FILED THEM. THE SUPERINTENDENT
 SHALL DETERMINE AN ADJUSTED, LOWER RATE DEEMED TO BE IN COMPLIANCE  WITH
 THE  STANDARDS  SET  FORTH  IN  THIS ARTICLE, AND THE RATE SO DETERMINED
 SHALL APPLY.
   § 3. This act shall take effect on the first of January next  succeed-
 ing the date upon which it shall have become a law.

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