Well maybe not #1, but some in Albany seem to feel that the title insurance industry in New York is solely comprised of the proverbial snake oil salesman who will do and say anything to get business!
For the New York State Department of Financial Services, the operative word in the prior sentence is ‘do‘ as they seem believe that for every title insurance provider in the New York, the way that business is earned is through ‘inducements’ and the expectation of a quid pro quo for said inducement.
Of course for many title insurance companies in New York, the operative word in the prior sentence is ‘earned‘ because it’s through performance and quality of the work product that clients return with future deals.
I apologize now for many readers will view this article as beating a dead horse. This, as I have opined here in the past that there is a major difference between the normal business development activities that take place in every industry such as a breakfast or lunch with a prospect, and buying business through extravagant gift-giving that implies an expectation, or quid pro quo, for the next deal(s).
So what is that brings me to write about this today? An article in The Real Deal that talks about a NYS Senator, Susan Serino, who introduced a bill to reverse the title insurance regulations imposed by the NYSDFS. The article goes into the supposed conflict of interest surrounding her actions due to the fact that her husband was paid $5,000 to $20,000 in 2016 by a title insurance company.
The article also does not speak to the range of business development activities no longer allowed by DFS regulation such as buying a cup of coffee or a lunch for a potential new client while discussing how that title insurance firm approaches protecting the policy buyers best interests.
Instead, the article refers to the new regulation as a ‘ban on gifts’!
In journalism, whether written or spoken, the turn of the phrase can alter how anything is perceived by the reader or watcher. Anyone watching or reading about politics over the past decade or so knows exactly what I mean.
For the purposes of this article, however, what is the reader of The Real Deal article to construe from the phrase ‘ban on gifts’?
Cars, vacations, lap dance at strip clubs (something that has been written about many times), Cartier watches? To be perfectly honest I, along with the majority of small companies that comprise the New York State title insurance industry, have no idea because we do not engage in such activities.
We get business the old-fashioned way that is by earning it through performance, and then keeping it by making sure that our performance level does not waver!
Attempts By Some In Albany To Reverse Some Of NYSDFS Regulation 208
When it comes to claims of conflict of interest by certain legislators in Albany I have no doubt that in some cases it exists. Politicians are, after all, politicians. We often see funny statements and then votes coming out of our elected leaders whether on the state or federal level.
We also sometimes see lifelong public servants who somehow become wealthy while earning modest incomes from their elected work.
All of that said isn’t it possible, even remotely possible, that in Albany our state legislators sought (seek) to reverse some of the more extreme aspects of the NYSDFS regulations because the regs. are patently unfair to the 95-99% of the small title insurance businesses across New York who are merely trying to compete in an extremely competitive market?
And, by compete, I mean taking a prospect out for coffee or lunch!
And for all of the painting of every title insurance company with one broad brush, remember that since Hallmark Abstract Service opened its doors in 2008 we have preached the following to our ultimate client, the buyer of a commercial or residential property or the refinancer of a mortgage:
- The consumer has the right to choose the title insurance provider,
- The consumer needs to check on the financial strength of the underwriter issuing the policy,
- The consumer needs to explore the claims experience of the title insurance provider as it varies between companies, and
- 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.
Thoughts, questions or comments? Please let me know.
Michael Haltman, President
Hallmark Abstract Service
email@example.com, (646) 741-6101