Mind if I look in the trunk, sir?

Remember Alliance Title, the company that grew from 25 employeees to more than 2,000 in nine years and then abruptly closed its doors in December?

This is apparently just a formality, but the California Department of Insurance is holding a hearing today on the "Cease and Desist" order it filed against the company Feb. 21. According to the order, the company's net worth was NEGATIVE $50.6 million as of Nov. 30, and Alliance Title had a working capital deficit of $22.1 million.

Claiming the company is "in a financially hazardous condition" California regulators ordered Alliance Title to stop writing any new businesss, barred it from transfering or removing assets from the state, and forbid it to "destroy or conceal the location of any books, records or accounts."

A new report out today by Demotech Inc. estimates that nationwide, title insurers saw revenue fall 14 percent between 2006 and 2007, to $14 billion -- the biggest year-over-year decrease since 1995.

California and Florida, which together account for more than one-fourth of title insurance premiums nationwide, saw even bigger revenue decreases -- 23 and 30 percent respectively, Demotech said.

Alliance Title seems to have had other problems associated with its rapid growth. The company and its parent, Mercury Companies Inc., were sued over their recruitment of employees from rivals, with Mercury agreeing in July to pay LandAmerica $12.5 million in one case and facing an $8.3 million judgement in another (see Inman News story).

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