New Mexico lawmakers will have to wait a year before tinkering with the state’s uniform title insurance rate regulations, with Gov. Bill Richardson saying the issue is too complex for legislators to tackle in their lone 30-day meeting session this year.
New Mexico’s unpaid “citizen-legislators” meet for just 30 days in even numbered years, and can debate only budget and tax issues or legislation the governor places on the agenda.
A spokesman for the governor said Richardson is not opposed to title insurance reform, but that his primary focus for the abbreviated 2008 legislative session is health insurance.
The legislature’s 30-day meeting “is simply not enough time for a full and fair hearing on the issue,” which should be thoroughly studied to ensure consumers don’t end up paying higher rates, Richardson’s spokesman, Allan Oliver, told the Associated Press in a story published in the Albuquerque Tribune.
The New Mexico Public Regulation Commission, the state attorney general and an independent think tank that has studied the state’s title insurance industry had all asked that the issue of title insurance reform be placed on the agenda for the current legislative session, which is scheduled to end Feb. 14.
Title insurance in New Mexico has been “completely regulated” by the state since 1985, the Public Regulation Commission said in a Nov. 19 letter to Richardson posted on Think New Mexico’s Web site.
Rate regulation “has denied consumers the opportunity to benefit from competition among title insurance companies based on price or value,” and provided the title insurance industry with immunity from negligence suits, the commission said.
The commission cited Florida and California as states that have alternative regulatory models that “can bring the benefits of competition” to the industry “without exposing consumers to undue risks.”
Think New Mexico, a Santa Fe-based independent and nonpartisan think tank, estimated in a report that competition could save New Mexico home buyers approximately $40 million a year.
New Mexico Attorney General Gary King on Jan. 4 filed a request with the state’s Superintendent of Insurance urging an 11.4 percent reduction in title insurance rates.
In a press release, King said that New Mexico’s title insurance rate regulation takes away the incentive for companies to compete on price, and that insurance underwriters instead market their services to real estate professionals who can steer business to them.
Consumers end up paying the sales and marketing costs title agents and title insurance companies incur in this “reverse competition” for business, King said, calling on the state insurance commissioner to collect data from title insurers that would reveal unreasonable expenses.
Officials in the title insurance industry and their family members contributed $30,000 to Richardson’s presidential campaign, and his campaign manager, Dave Contarino, founded a title company in Santa Fe with his wife, Linda Marquette, who is president of the company, the Associated Press reported.
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