Senate committee approves title regulation legislation

The committee substitute for Senate Bill 953, sponsored by Sen. Kevin Engler, R-Farmington, was unanimously approved in Senate committee and will now be placed on the perfection calendar to be taken up for debate before the full Senate, according to a Missouri Department of Insurance news release.

The legislation was filed after no fewer than five title agencies went out of business in Missouri in the last two years. Many consumers who filed escrow funds with those agencies lost their money, and as a result their homeownership was, at the very least, delayed.

The legislation would provide protection for consumers who purchase property with the help of a title agency.

The bill would improve Department of Insurance efforts to enforce title insurance law.

For example, if the department found that an individual violated title insurance laws, there would be several disciplinary actions available to correct the situation, including cease-and-desist orders and civil penalties.

“I commend the Senate Committee for passing this bill,” said Dale Finke, director of the Missouri Department of Insurance, in the release. “This bill grants the department tools it needs to effectively regulate this industry.”

Provisions in the bill require that money received in the course of doing business as a title agent is kept separate from all other funds. This would prevent the title agency from using escrow funds for any purpose other than the express purpose intended by the consumer.

The act also would require title insurance companies to impose a reasonable amount of control over the agencies that write policies on their behalf.

Title insurance companies must have written guidelines that all agencies must follow, and must maintain an inventory of all policy numbers that each of their agencies writes. Title insurers must have on file proof that each of its agencies is licensed with the state.

The act would also bring the definition of premium in line with the definition set forth by the National Association of Insurance Commissioners.

This definition would allow agents to charge the consumer an amount for the issuance of an insurance policy, closing protection, any endorsements or special coverage. The premium amount that consumers are charged also could include amounts retained by agents, attorneys or abstractors, or for overhead and miscellaneous expenses.