NY State Senate Bill 2023-S4357

Senate Bill S4357

2023-2024 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

Current 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
Jan 03, 2024	referred to insurance
Feb 07, 2023	referred to insurance

2023-S4357 (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§6403 & 2321, Ins L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S8340
2021-2022: S464

2023-S4357 (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.

2023-S4357 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S4357

SPONSOR: FERNANDEZ
 
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 IDEA 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 filing 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sive to be withdrawn and the rate suspended prospectively upon fifteen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 are passed onto consumers in the form of higher premi-
ums. 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:

2021-2022: S464

2020: S8340

 
FISCAL IMPLICATIONS:

TBD

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

2023-S4357 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4357
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             February 7, 2023
                                ___________
 
 Introduced by Sen. FERNANDEZ -- 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08602-01-3

 S. 4357                             2
 
 EMERGENCY BASIS IF THE SUPERINTENDENT WARRANTS SUCH ACTION TO BE  NECES-
 SARY.
   § 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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