ALTA® Expresses Disappointment in California Insurance Commissioner's Rejection of Judge's Ruling to Uphold Cease and Desist Order Against Radian Guaranty
April 15, 2003
Washington, DC– April 15, 2003 – The American Land Title Association (ALTA), the national trade association for the title insurance industry, today expressed its disappointment in California Insurance Commissioner John Garamendi's rejection of Administrative Law Judge Leonard L. Scott's ruling to uphold the cease and desist order against Radian Guaranty, Inc. and Amerin Guaranty Corporation. While the order remains in effect, the Commissioner will decide the case based on additional evidence and testimony regarding legal issues surrounding the Radian product.
"We are surprised by Commissioner Garamendi's decision, and that he feels he lacks sufficient evidence to rule on the appropriateness and legality of the cease and desist order against Radian," said James Maher, executive vice president of ALTA. "It is important to stress that this is not a ruling in Radian's favor, and that the cease and desist order remains in effect. We are confident that, after a further review of the facts, the commissioner will come to the same well reasoned conclusion as Judge Scott and the DOI staff, and that the order against Radian will ultimately be affirmed."
The order, issued in June 2002 by the California Department of Insurance, prohibited Radian and Amerin from selling its Radian Lien Protection (RLP) policy because the department deemed it a form of title insurance, which Radian is not licensed to sell in California or any other state. The order further prohibited Radian from selling the RLP anywhere in the nation or risk losing its license to sell it's core product, private mortgage insurance (PMI), in California.
Although Radian appealed the order on the grounds that the RLP was a form of PMI insurance and not title insurance, Judge Scott strongly disagreed, saying the RLP was "title insurance masquerading as mortgage guaranty insurance."