Washington State Passes Bill Forming Rating and Advisory Organizations
April 13, 2017
A bill that would establish title insurance rating and advisory organizations in Washington is awaiting delivery to Gov. Jay Inslee.
Once delivered, the governor has five days to act on HB 1450 or it becomes law without signature.
Specifically, the bill would:
- Authorize and establish a framework for title insurers to become members of and subscribe to the services of title insurance rating organizations for the purpose of making title insurance form and rate filings with the Office of the Insurance Commissioner (OIC).
- Give the OIC authority and direction to examine title insurance rating organizations and to issue a written decision directing a title insurance rating organization to take specific action, when appropriate.
- Authorize the sharing of aggregate information and experience data between title insurance rating organizations, title insurers, and the OIC's designated statistical reporting agent, subject to restrictions.
- Modify the confidentiality of filed and approved title insurance rate filings to allow for public inspection only of aggregate information that cannot be used to identify an individual insurer.
Currently, title insurers must file title insurance forms and rates with the Office of the Insurance Commissioner (OIC). Insurers' rate filings must include sufficient information to allow the OIC to determine whether the filed rates meet the standard.
The Washington Land Title Association supports the bill.
In 2009, Washington began requiring title insurers to actuarially justify their rates. According to the industry, this has created confusion and frustration.
“This can cost tens of thousands of dollars, and is burdensome, especially on smaller title insurers,” supporters of the bill have testified.
Oregon follows a similar model that works well, according to the WLTA.
The industry has said that the “Supreme Court of the United States has approved of rating organizations so long as there is active supervision of their activities by the state, which is included in this bill. If a title insurance rating organization is formed in Washington, it can simplify the OIC's form and rate review process because the information insurers submit to the OIC for review will be in a standard form. Rather than reviewing multiple rating manuals and rates, for example, the OIC could potentially review one rating manual and rate, or at least fewer than the OIC must review now. Title insurers would still compete at a service level, and there could be more than one rating organization, one for Eastern Washington and one for Western Washington.”
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