The Missouri Department of Insurance, Financial Institutions & Professional Registration released information regarding its recent investigations into several St. Louis area title agencies. The findings of this investigation prompted the Consumer Affairs Division of the department to request that Cease and Desist orders be issued to several of the agencies visited. Those agencies are:
Assured Title Company, License No. AG00692
Bankers & Lenders Title, LLC, License No AG8016545
Champion Title, LLC, License No AG8019258
Dependable Title, LLC, License No AG8019209
Freedom Title, LLC, License No AG8016324
Investors Title Company, License No AG1228181
Lewis & Clark Title, License No AG8013080
Mayer Title Company, LLC, License No AG8019232
Nations Title Agency, Inc., License No AG12519
Residential Title Services, Inc., License No AG8016430
Security Title Insurance Agency, LLC, License No AG1226492
St. Louis Title, LLC, License No AG8014269
Title One, LLC, License No AG8015998
Title Partners, LLC, License No AG8014856
Tristar Title Company, LLC, License No AG8021553
U.S. Title Guaranty Company, Inc., License No AG1223878
The Statements of Charges and Orders to Show Cause can be viewed at the Department's website.
“We performed these investigations in an effort to review how the title industry in the St. Louis area is marketing, underwriting and rating insurance coverage,” said Dale Finke, director of the Missouri Department of Insurance, Financial Institutions & Professional Registration. “Unfortunately, our findings are discouraging, and we must take action to ensure Missouri consumers are treated fairly and honestly.”
The Consumer Affairs Division of the department initiated administrative enforcement actions against 16 title insurance agencies by submitting Statements of Charges to Director Finke. The division alleges that all 16 are using and collecting premiums at rates that had not been filed with or approved by the director, and all are misrepresenting, concealing or suppressing information from consumers regarding the actual cost of a title insurance policy and the charges or fees for services related to the examination of title records. Over half of the agencies are charging varying title insurance premiums that are unfairly discriminatory. Other alleged violations include the use of kickbacks, the use of all-inclusive title fees that don’t represent the actual cost of title insurance, and the failure to prominently display premium schedules filed with the director in their offices.
Each agency has 15 days to request a hearing to respond to the Statement of Charges. If the title agency chooses not to request a hearing, the department will order the agency to stop all unlawful business practices and impose civil or monetary penalties related to their unlawful practices.
“These problems demonstrate yet another need for reform in Missouri’s title insurance industry,” Finke said. “Our hope is that in January the General Assembly will also pass a bill to address the lack of oversight over escrow funds.”
The department proposed title reform legislation last year after no fewer than five title agencies in the state went out of business in the prior two years. This legislation would have required insurance companies to impose reasonable controls over the agencies that write policies on their behalf. This bill was brought up for final passage on the last day of the 2006 Legislative Session, but was delayed due to a filibuster in the Senate.
Rachel Dollar, the editor of Mortgage Fraud Blog is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors.