The American Land Title Association Testifies at Maryland Insurance Administration Hearing
|June 29, 2009|
The American Land Title Association (ALTA) testified Thursday, June 25, in Annapolis, Md., during a public hearing held by the Maryland Commission to Study the Title Insurance Industry.
While no community members voiced concern to the commission, more than 35 title insurance professionals listened to testimony from 10 individuals supporting the industry, including Justin Ailes, ALTA’s director of government affairs.
Testimony from those in attendance centered on three main points: consumer complaints reported by the Maryland Insurance Administration, who is qualified to conduct closings and the cost of title insurance and the amount in claims the industry pays out.
The Maryland commission was established in 2008 to make recommendations for changes to state laws relating to the title insurance industry and is co-chaired by Sen. Delores Kelley and Del. David Rudolph. The commission will hold its final of five hearings July 16 in Baltimore.
The commission invited members of the public to testify on issues or concerns relating to title insurance, title agents, the manner in which real estate settlement practices are conducted, the handling of real estate escrow accounts, and any difficulties that a person may have experienced with the title insurance industry.
Despite not being fully informed of what would be discussed at the hearing, ALTA provided testimony that was given in Pennsylvania on May 28 regarding the value of title insurance.
“The responsibility is on the industry to educate people and stakeholders interested in learning more about title insurance,” Ailes said. “We, as the national group, have been begging with state administrations to hold Title 101 seminars. We just gave a presentation at the recent National Association of Insurance Commissioners meeting in Minneapolis, and it was greatly received.”
Ailes suggested if there was legislation that came out of the commission, it would be more successful if it has full buy-in from the industry. He also shared that ALTA has a program called the Title Industry Consumer Initiative, which is a multi-faceted strategy for improving oversight of the industry and educating and protecting consumers. He also said ALTA is supporting the Borrower Right of Inspection, developing legislation that has not yet been introduced but would require lenders to provide closing and settlement documents to consumers 24 hours before closing.
Darlene Arnold, senior enforcement officer of the MIA, shared the breakdown of complaints received by the administration. She reported that of the 392 complaints received so far this year, 245 were title insurance related. Of the 245 complaints, 106 are alleged violations of trust requirements, 92 relate to surety and fidelity bond issues, 13 are from alleged failure to record documents in a timely manner, 12 are from alleged illegal disbursement of funds from escrow accounts and 10 alleged instances of failure to pay property taxes.
Many in attendance wanted better clarification on the complaints, and how many have already been resolved.
“Consumer complaints aren’t in anyone’s interest,” Ailes said. “They are not in the consumers’ interest, the industry’s interest or the regulator’s interest. When these things occur, let’s find out what they are and fix the problem. From our standpoint as a national group, we are eager to support any improvements that can be made.”
Kelley closed the nearly three hours of testimony by indicating that the commission was only in a learning mode at this point, and urged those in attendance to bring consumers to share their stories relating to the closing process.
ALTA urges representatives of the Maryland Land Title Association to bring consumers to the final hearing to share success stories on how the industry solved title issues to help a transaction close, either during the process or at the closing table.