Relates to rate filings for title insurance.
TITLE OF BILL: An act to amend the insurance law, in relation to rate filings
PURPOSE: This bill will reduce the cost of title insurance in New York by no longer requiring the Superintendent of Financial Services to approve rates, rating plans and rules manuals before title insurance can be sold.
SUMMARY OF PROVISIONS:
Section 1 removes title insurance from the list of insurances that require prior approval of rates, rating plans and rules manuals by the Superintendent of Financial Services.
Section 2 provides for an immediate effective date.
JUSTIFICATION: Title insurance is included among the types of insurance that require prior approval of rates, rating plans and rules manuals by the Superintendent of Financial Services. This requirement reduces competition among title insurance companies and yet there is no reason for title insurance to be so rigorously regulated. In New York, only a fraction of one percent of title insurance policies ever have to pay against a claim, and only about five percent of premiums are paid out to meet claims. This is far less than other insurance types that require prior approval, such as automobile insurance with a comparative sixty to seventy percent. Despite the low rates of claims and payouts, title insurance costs in New York are the highest in the county because state regulations restrict price competition. The average title insurance premium in New York State is nearly twice the national average and over three times the average in North Carolina. The high cost of title insurance is a major, if not primary contributor to New York having the highest closing costs in the nation. High closing costs reduce the amount of real estate investment taking place in New York, and make it more costly for residents to buy and sell properties, ultimately reducing both the value of properties and the monies available for residents to spend on other goods and services in the state.
LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: The act shall take effect immediately
STATE OF NEW YORK ________________________________________________________________________ 2091 2013-2014 Regular Sessions IN SENATE January 10, 2013 ___________Introduced by Sen. GALLIVAN -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance AN ACT to amend the insurance law, in relation to rate filings THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subsection (b) of section 2305 of the insurance law, as amended by chapter 11 of the laws of 2008, paragraph 13 as amended by chapter 136 of the laws of 2008, is amended to read as follows: (b) rate filings for: (1) workers' compensation insurance; (2) motor vehicle insurance, or surety bonds, required by section three hundred seventy of the vehicle and traffic law; (3) joint underwriting; (4) motor vehicle assigned risk insurance; (5) insurance issued by the New York Property Insurance Underwriting Association; (6) risk sharing plans authorized by section two thousand three hundred eighteen of this article; (7)
[title insurance; (8)]medical malpractice liability insurance; [(9)](8) insurance issued by the Medical Malpractice Insurance Asso- ciation; [(10)](9) mortgage guaranty insurance; [(11)](10) credit property insurance, as defined in section two thou- sand three hundred forty of this article; and [(12)](11) gap insurance [(13)](12) Private passenger automobile insurance, except as provided in section two thousand three hundred fifty of this article. shall be filed with the superintendent and shall not become effective unless either the filing has been approved or thirty days, which the superintendent may with cause extend an additional thirty days and withEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02101-01-3 S. 2091 2
further cause extend an additional fifteen days, have elapsed and the filing has not been disapproved as failing to meet the requirements of this article, including the standard that rates be not otherwise unrea- sonable. After a rate filing becomes effective, the filing and support- ing information shall be open to public inspection. If a filing is disapproved, notice of such disapproval order shall be given, specifying in what respects such filing fails to meet the requirements of this article. Upon his or her request, the superintendent shall be provided with support and assistance from the workers' compensation board and other state agencies and departments with appropriate jurisdiction. The loss cost multiplier for each insurer providing coverage for workers' compensation, as defined by regulation promulgated by the superinten- dent, shall be promptly displayed on the department's website and updated in the event of any change. S 2. This act shall take effect immediately.