Industry News

Calif. title insurance rate cap expected to gain approval

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The California Office of Administrative Law has published a decision outlining the mostly minor issues that prevented its legal experts from signing off last month on a proposal to cap title insurance rates and escrow fees. Former Insurance Commissioner John Garamendi submitted the proposed rate cap, which would use a cost-based formula to limit the profits of title insurance and escrow companies, to the OAL on Jan. 5. The OAL, which is charged with reviewing regulatory changes proposed by state agencies to ensure they comply with the law, issued a notice of disapproval on Feb. 21. The next day Garamendi's successor, Steve Poizner, said the OAL had raised only minor issues of clarification, while validating the Department of Insurance's authority to institute a rate cap -- an issue raised by the industry during hearings last summer. Poizner said he agreed with Garamendi's assessment that there was a lack of competition in the industry, and that he would "aggressively enforce" a rate ...