Colorado is considering legislation that would appoint a title insurance commission to combat potential conflicts of interest between the industry’s regulator and the companies she oversees.
Title insurance companies in Colorado (long considered a battleground for title industry regulation) currently fall under the oversight of the commissioner of the Division of Insurance, which falls under the umbrella of the Division of Regulatory Agencies. Senate Bill 15-210 would retain the insurance commissioner’s authority to regulate title insurance premium rates, issue licenses to new companies and ensure existing companies are meeting their licensing requirements, but it also would establish a seven-member commission that would have a say in new rules set by the commissioner, propose new rules for approval and review disciplinary actions related to the regulation of the title insurance business.
Three commission members would be underwriter employees with at least five years of title industry experience, and at least one member would be from a company with a minimum of $ 500 million in assets. Three other members would be title agency employees with at least five years of experience. An additional member would be a member from the public at large who is not engaged in title insurance business. No more than one member of the commission would be appointed from a single company — or an affiliate or subsidiary of the company.
Commission members would be selected by the governor to serve four-year terms. The positions would be non-paid, but the state would pay for any travel expenses that members incur. The commission would conduct physical meetings at least once per month.
The bill’s stated intent is to “provide the autonomy necessary to avoid potential conflicts of interest between the responsibility of the commission in the regulation of title insurance agents, agencies and companies, and the responsibility of the division in the regulation of lines of insurance other than title insurance.”
Colorado Gov. John Hickenlooper appointed Marguerite Salazar insurance commissioner in 2013. Salazar also is a member of the National Association of Insurance Commissioners’ (NAIC) Title Insurance Task Force, which monitors issues and developments in the title insurance industry and works with regulatory bodies across state lines to combat fraudulent or unfair settlement-service practices.
Insurance officials who serve on the task force often share with each other information about new legislative or regulatory initiatives in their state. The Colorado proposal is similar to legislation introduced by Utah lawmakers who want to strip that state’s title and escrow commission of certain powers due to accusations that it improperly investigated, prosecuted and disciplined large out-of-state companies.
Utah Sen. Curt Bramble (R-Provo) has called Senate Bill 143 called a “hard-fought compromise” between local title companies and national ones. The bill easily passed both legislative chambers and awaits the governor’s signature. Its final text was supported by the Utah Land Title Association.
Senate Bill 15-210 was introduced March 11 and assigned to the business, labor and technology committee. If signed by the governor, the bill would take effect 90 days after the end of the legislative session, or on Aug. 5 if the Colorado General Assembly adjourns on May 6.
The legislation is co-sponsored by Laura Woods (R-D19), Randy Baumgardner (R-D57), Chris Holbert (R-D30) and Beth Martinez Humenik (R-D24) and Rep. Jeni Arndt (D-D53). Lead sponsor Woods did not respond to interview requests. Sources tell Inman News that the Land Title Association of Colorado (LTAC) worked closely with the sponsors on the legislation, but the trade group did not respond to requests for comment by press time.