New York State Title Insurance Industry: ‘I’m Mad As Hell And I’m Not Going To Take It Anymore’!

By | January 13, 2018

Update January 16, 2018: ‘The New York State Senate unanimously passed a bill Tuesday that will allow title companies to resume buying clients coffee, taking them out for lunch or treating them to a round of golf.

Sponsored by Sen. James Seward of Oneonta, the bill — which now heads to the Assembly and Gov. Andrew Cuomo…‘ (Source: The Real Deal)

Now the question is how the Assembly will vote and, if passed there, what Cuomo will decide to do? I suppose the question is what would be the most politically expedient decision for the Governor to make!


January 12, 2018, the New York State Assembly Insurance Committee held a hearing to discuss the title insurance industry and the new regulations put into place by the Department of Financial Services (NYSDFS)!

Constituencies from every side of the argument were present including NYSDFS Superintendent Maria Vullo, representatives from a variety of consumer watchdog groups, title insurance underwriters, title insurance abstract companies, the Title Insurance Rate Service Association (TIRSA), title closers and the NYS Land Title Association (NYSLTA).

Maria Vullo had the job of defending new Regulations 206 and 208 while the consumer watchdogs were there to vilify the New York State title insurance industry as marauding thieves robbing from the consumer vis a vis real estate transactions in order to line their own pockets.

The industry representatives were in many cases operating at cross-purposes because, contrary to the position taken by Maria Vullo and the NYSDFS, all who operate in the New York title insurance industry cannot be painted using one broad brush!

The hearing was chaired by Assemblyman Kevin A. Cahill who did an excellent, and in my opinion, very fair job asking questions that got to the heart of specific issues concerning those who testified.

With Title Insurance Companies, If A=B And B=C, Then Does A Always = C?

To Paint With A Broad Brush: ‘To describe a class of objects or a kind of phenomenon in general terms, without specific details and without attention to individual variations.‘ (Google)

During the marathon session in Albany discussing the pros and cons of the way in which the title insurance industry in New York operates, Superintendent Vullo basically described all providers of title insurance as companies who induce attorney’s to send them deals with little regard to the prices being paid by the consumer.

The methods of inducements she mentioned include, but apparently are not limited to, trips to strip clubs, luxury boxes at stadiums, $1,000 gift cards and very expensive dinners. According to Ms. Vullo the consumer, who typically relies on the attorney or mortgage lender to choose the title insurance provider, pays the price for these activities through costs that are higher than necessary.

So let’s summarize…Are there some companies who engage in activities such as the ones described above? Absolutely in the same way that every industry has some bad actors.

But do ALL companies therefore act in this way necessitating that the entire industry be precluded from even the most basic of business development activities such as taking a client or prospect out for lunch?

Absolutely Not!

It’s my fear that collateral damage resulting from the implementation of Regulations 206 and 208 will be that many of the smaller title insurance providers go out of the business along with some number of title closers who have seen their compensation dramatically cut.

And who will pay the price for this? The consumer of course! The very same people that these regulations were put into place to protect!

What Has Hallmark Abstract Service Always Preached?

From ‘Albany Contends That New York Title Insurance Providers Are ‘Unscrupulous’ (No Moral Principles)‘:

  1. The consumer has the right to choose the title insurance provider,
  2. The consumer needs to check on the financial strength of the underwriter issuing the policy,
  3. The consumer needs to explore the claims experience of the title insurance provider as it varies between companies, and
  4. That the consumer needs to be aware of the fact that the non-title insurance premium fees can, and to this point, have varied widely between title insurance firms. We go on to advise that to make certain the consumer was not being charged too much, they should get a title bill from a second firm to use as comparison.

Finally, while the NYSDFS is likely intransigent in its position concerning, and opinion of, the NYS title insurance industry it is my hope that as a result of the hearing held January 12 that some level of compromise can be reached between all of the parties involved!

Thoughts, questions or comments? Please let me know.

Michael Haltman, President
Hallmark Abstract Service, (646) 741-6101

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