Title Insurance And Governor Cuomo’s Proposed Regulatory Changes: Our Thoughts!


A sensational headline to describe a plan put forth by New York State Governor Andrew Cuomo to reduce the cost of title insurance that’s paid for by consumers!

Title insurance, for those who may be unfamiliar, ensures that the buyer of residential or commercial real estate or someone refinancing a mortgage is receiving free and clear title to what may be one of, if not the largest, financial expenditure that they may ever make.

In a press release dated April 29, 2015, New York State Governor Andrew Cuomo proposed a reduction in title insurance premiums for purchases of up to 20% and reduction in premiums for refinances of up to 60%. He also proposed that a cap be placed on the ‘other’, non-title insurance premium fees incurred by the consumer.

But before getting to our take on the Governor’s proposal, we feel that it’s important for us to clearly state that in our opinion the vast majority of firms who work and compete in the title insurance space in New York State are honest and hard working men and women who do business the right way!

Of course, as you will find in any industry, there will always be some bad actors.

It is our sincere hope that Governor Cuomo does not attempt to unfairly penalize the majority simply to make a political point.

Our View

For any small business a significant reduction in earnings power as described in the Governor’s press release, particularly if unwarranted, could never be viewed as a positive!

This is particularly true when it is our belief that title insurance firms like ours are currently being fairly compensated for the level of expertise that we bring to what could be the most significant financial expenditure of our clients lives!

That said, if the Governor’s claim of kickbacks being paid by some firms to acquire business proves to be accurate, his proposal if enacted would be a de facto leveling of the playing field negating pay to play as a part of anyones business model.

As stated by the American Land Title Association, “Those participating individuals should be held accountable to the full extent of the law for the sake of consumers and the real estate industry professionals who work to remain compliant with state and federal regulations.”

Instead, all companies will use the business acquisition model that’s based solely on relationship building, referrals made by satisfied clients and the earning of a stellar reputation for doing excellent work.

Having opened Hallmark Abstract Service in 2008 at the depths of the financial crisis we know of no other way!

At issue for the Governor is the following from yesterday’s press release:

…The regulation outlines categories of expenditures which, when provided as an inducement for title insurance business, are improper and violative of the New York Insurance Law. These expenditures include meals, entertainment, vacations and gifts that are provided to attorneys, real estate professionals, and others, who represent consumers and order title insurance on their behalf.

The investigation revealed that these types of expenditures are routinely made by title insurance corporations and agents in an effort to secure title insurance business. These improper expenditures have been included in the calculation of title insurance rates and have saddled New York consumers with excessive title insurance premiums for years. The regulation mandates that these improper expenditures, which violate the anti-inducement provision of the Insurance Law, be eliminated from the rates, thereby resulting in lower title insurance premiums.

The regulation also imposes caps on ancillary charges…

Again, as with the issue of kickbacks, if it is shown that some firms are egregiously marking-up ancillary charges then a cap of some kind could be reasonable to impose.

But as stated above it is our sincere hope that whatever changes if any are ultimately implemented by New York State, they are done in a thoughtful way with industry participation and not simply as part of a political agenda meant to curry favor with the real estate buying and refinancing public!

Finally it is our goal, and the goal of the vast majority of firms in our industry, to offer our clients value for their investment dollars along with the best title insurance product possible to protect them until such time that they decide to sell their home or commercial property.

That’s the only way we know how to conduct business.

Bottom-line? Does Hallmark Abstract Service support this proposal by Governor Cuomo to slash title insurance premiums and cap ancillary charges?

We do not but, what we do support, is a leveling of the playing field so that business is either earned or lost by the quality of the work provided and not, as stated by the Governor, through ‘kickbacks and other improper expenditures’!

New York State Governor Andrew Cuomo Proposes ‘Crack Down’ On The Title Insurance Industry!

Title Insurance And Governor Cuomo’s Proposed Regulatory Changes: An Industry’s Response!


Michael Haltman, President of Hallmark Abstract Service, New York.

HAS is a provider of title insurance in New York State for residential and commercial real estate transactions.

And, for anyone either buying a property or refinancing, remember that although your attorney will likely recommend a title insurance provider you always have the right to choose your own (click here to learn more)!

If you have any questions you can reach Michael by email at mhaltman@hallmarkabstractllc.com.

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