Texas regulators have ordered title insurers to reduce their rates by 3.2 percent effective Feb. 1.
The order, signed by Texas Insurance Commissioner Mike Geeslin, will cut the cost of title insurance for a typical $100,000 home to $843, compared with $1,023 in 1998.
Title rates are set by the Texas Department of Insurance through actuarial analysis, which takes into account expenses, profit targets and loss history. In the last eight years, Texas has cut title insurance rates by 17 percent, including a 6.5 percent reduction in 2004, the department said in a press release.
California regulators are considering taking similar steps, after a study alleged a lack of competition among title insurers in the state. The study — conducted by the former chief economist for the Texas Department of Insurance, Birny Birnbaum — is disputed by title insurers.
In one of his final acts before being sworn in as lieutenant governor, on Jan. 5 former California Insurance Commissioner John Garamendi submitted a proposal to roll back title insurance rates to 2000 levels. The California Office of Administrative Law has 30 days to review the proposal.
Title insurers maintain California’s insurance commissioner does not have the legal authority to roll back and cap rates. When Garamendi’s successor, Silicon Valley entrepreneur Steve Poizner, was sworn into office Jan. 8, he told Inman News he needed to review the proposed title insurance cuts before taking a position on them.