Washington State Delays Implementation of New Rate Structure
|April 21, 2011|
The Washington State Office of the Insurance Commissioner (OIC) postponed the transition date requiring title insurance underwriters to file rates with the commissioner.
Last year, the OIC adopted new regulations requiring the filing and prior approval of title insurance rates beginning in 2012. Title insurers would have been required to submit rate filings to the commissioner by Sept. 1, 2011, for rates to be effective on Jan. 1, 2012. However, the OIC delayed implementation because underwriters indicated that a one year snapshot of data would not be sufficient for determining rates. The OIC said the postponement of the transition date of filing the rates with the commissioner would permit insurers to obtain at least two years of data from their agents and from their own businesses.
One of the concerns the Washington Land Title Association and the American Land Title Association has shared with the OIC is that the rule requires title insurance agents to report premium, policy count and expense data annually to its underwriter. This information would be used by the underwriter to help support its proposed rate, according to the OIC.
Agents believe providing this financial data to their underwriters would create an unfair competitive advantage. The WLTA and ALTA have discussed this issue and other problems regarding the rule with the OIC. Both associations will continue to work with the OIC to seek clarification to the rule and how it impacts agents.
Among the items that need to be addressed include the formation of a statistical bureau, which would allow agents to file financial data to a third party, keeping individual agent data confidential. Other items needing clarification include the type of data that is required, which is not in harmony with the data call being developed by the National Association of Insurance Commissioners, and the possibility of forming a rating bureau.
The OIC is accepting written comments regarding the rule until June 3, 2011. Comments may be submitted to:
PO Box 40258
Olympia, WA 98504-0258
Click here to read the complete rule issued by the OIC last year.