New York Gov. Andrew Cuomo and New York Superintendent of Financial Services Benjamin Lawsky today proposed new regulations for the title insurance industry, including restrictions on meal and entertainment expenses.
Cuomo and Lawsky argued that "kickbacks and other improper expenditures" within the industry drive the cost of title insurance unnecessarily higher for consumers. In a press release, the two said the rules would prohibit the currying of favor through direct or indirectly given meals and gifts in exchange for title insurance business. The rules would also impose caps on ancillary title insurance charges.
"New Yorkers should not have to foot the bill for outrageous or improper expenses made by title companies just to refinance or close on their home," Cuomo said in a release. "Our administration will not stand for that kind of abuse in the title insurance industry, and these new regulations will help ensure that New Yorkers are protected from unfair charges and get the most bang for their buck."
To enforce the above proposed rules, the governor and superintendent will also seek to require filings by title insurance companies once every three years to demonstrate that rates comply with state insurance law, and are not excessive, inadequate, or discriminatory.
"The New York State Land Title Association has been working cooperatively with the New York State Department of Financial Services (NYSDFS) to ensure that consumers are protected from unscrupulous actions, receive the benefits of greater transparency and work within an appropriate regulatory structure," said New York State Land Title Association president Rafael Castellanos in an emailed statement. "In 2014, the Association provided important feedback on legislation establishing the licensing of title agents, and intend to provide valuable input on today's proposed regulations." .
In the release announcing these proposed rules, Cuomo and Lawsky say that a New York Department of Financial Services investigation into the title insurance industry found inducement arrangements to be common and expensive to consumers. The governor's office and NYDFS claim that they could raise premiums for consumers by as much as 60%, depending on the type of transaction insured.