ALTA® Commends California Insurance Commissioner John Garamendi For Upholding Cease and Desist Order Against Radian Guaranty
|July 22, 2003|
National Trade Association Says Decision Reinforces Consumer Protection From Unregulated, Unlicensed Activity
Washington, DC– July 22, 2003 – The American Land Title Association (ALTA), the national trade association for the title insurance industry, today applauded the decision by California Insurance Commissioner John Garamendi to sustain the cease and desist order issued by the Department of Insurance in June 2002 against Radian Guaranty, Inc., Amerin Guaranty Corporation and Radianexpress.com Inc. The order required the companies to stop selling unlicensed title insurance in the state, which was appealed by Radian on the grounds that its product, Radian Lien Protection, was a form of mortgage guaranty insurance and not title insurance. Administrative Law Judge, Leonard Scott, affirmed the legality of the Department’s order on Jan. 6, 2003 ruling that Radian’s product is title insurance, which Radian is not licensed to sell in California or any other state. Commissioner Garamendi, in his final decision dated July 14, 2003, sustained the order.
“We applaud the Commissioner’s decision affirming the appropriateness and legality of the cease and desist order against Radian, which protects consumers against unregulated, unlicensed title insurance products,” said James Maher, executive vice president of ALTA.
“Radian should become a licensed title insurer to issue this product and submit to the regulatory oversight that is in place to safeguard consumers.”
According to Maher, Radian aggressively marketed its Lien Protection Product as an alternative to title insurance, claiming essentially the same benefits as title insurance but at a substantially reduced price – claims he says are completely false and misleading.
“Not only are costs of title insurance by licensed title insurers comparable to or less expensive than Radian’s product, the protection and benefits of traditional title insurance are substantially greater.”
The California cease and desist order also prohibits Radian from offering its RLP product in any other state or it will risk losing its license to sell mortgage guaranty insurance in California.