Florida Multi-Faceted Review of the Florida Title Insurance Industry
|July 21, 2006|
|A Preliminary Examination of Title Insurance Regulation, Pricing and Costs Structures [pdf]|
The Florida Office of Insurance Regulation (Office) completedf a multi-faceted review of title insurance regulation in the state. The Office said it would use the information from the study to begin a full review of title insurance rates charged in Florida. The 2006 Legislature funded both the title insurance study and the review of premiums charged for title insurance and related services.
“We have to make sure Floridians are charged premiums that are an accurate reflection of risk in addition to what is being charged for related title services,” said Insurance Commissioner Kevin McCarty. “We will combine the data from this study with an analysis of what consumers are presently paying for coverage to set fair and accurate rates for this industry going forward.”
The title insurance regulation examination studied three areas of the industry: a financial analysis of the Florida title insurance industry, a review of the regulatory treatment of title insurance premiums and title insurance, and a comparison of what Florida consumers pay for title insurance compared to consumers in other states.
The study found that the Florida title insurance industry is overwhelmingly dominated by five firms. It found that the loss ratios for the coverage are low relative to other states and that Floridians are paying more for comparable title insurance than consumers in other states. In fact, in some examples premiums in Florida were 136 percent higher than premiums in other states.
The study recommends tying premium rates to loss ratios thereby making the rates a reflection of the actual risks born by the insurer. Title insurance premiums totaled $15.5 billion in 2004.
The Office is presently developing a rule to govern the upcoming rate analysis and rate setting process.