Florida Title Insurance Study Advisory Council August 6 Meeting Report

The Florida Title Insurance Study Advisory Council (“Council”) met today, August 6, 2009. The agenda included presentations from the Florida Department of Financial Services and Office of Insurance Regulation, a discussion of title insurance regulation and title insurance consumer protection issues related to a specific court case.

Pursuant to the 2008 passage of HB 937, the Council’s mission is to conduct a comprehensive examination of Florida’s title insurance system and make recommendations to the Governor and the Florida Legislature on the best course of action on the issue for both consumers and the industry. Issues being considered by the Council include the history of title insurance in Florida, the regulatory structure, methods of meaningful data collection for the purpose of developing title insurance rates, and other pertinent topics necessary to render sound public policy recommendations. The Council must produce a report to the Florida Governor and Legislative leadership by December 31, 2009.

At today’s meeting, Florida Lieutenant Governor Jeff Kottkamp, who serves as Council Chairman, provided brief opening remarks and recognized Florida’s Insurance Consumer Advocate Sean Shaw for comments.

Mr. Shaw addressed a series of consumer protection-oriented questions to title insurance company representatives who were in attendance at the meeting. The discussion that followed touched on various related topics such as:   

• Defining the consumer in a title insurance transaction
• Clarifying Florida laws to protect policyholders if an insurer goes into liquidation
• Coverages included in a title insurance program

It was noted that title insurance is a financial protection, not a guarantee of clean title to property.  Generally, a title insurance policy is limited to the value of the property or the policy limit, whichever is less.

Representatives from the Iowa Title Guaranty Division (“ITG”) were on hand to review the State of Iowa’s laws regarding title insurance.  The ITG is a unique quasi-public entity that guarantees of Iowa real property titles, facilitate mortgage lenders’ participation in the secondary market and helps assure the integrity of Iowa’s land-title system.

Contrary to some perceptions, the Iowa representatives assured the Council that the ITG is not a government-run monopoly.  A lender may choose private title insurance other than that provided by the State. 

fter discussion between the Council members and Iowa representatives about the ITG and Iowa title industry practices, the consensus was that the Iowa system works in Iowa but may not work well in Florida because Florida is a much larger and wealthier state, per capita.