BILL NUMBER:S3571

TITLE OF BILL:

An act
in relation to directing the superintendent of insurance 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 insurance 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 insurance 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 insurance 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.

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

This act shall take effect immediately.