Texas Insurance Board Cuts Title Fees by 6%

DALLAS-A Texas Insurance Board ruling is slashing title insurance rates to levels of a decade ago. The mandated 6% cut in title fees takes effect Nov. 1.

“The Texas Land Title Association is disappointed that Insurance Commissioner Jose Montemayor severely cut the title insurance premium rate,” Jack Rattikin III, president the of Texas Land Title Association, said in a prepared statement about the recent decision. In 1998, the board ordered a 3% cut. “This latest decision means that title companies will have to provide title policies and services at substantially less than what they were authorized to charge a decade ago,” he explained in the statement.

With the decision cast in stone, some title insurance companies are lobbing a public relations play to alert customers of the change. Philip J. Shea, executive vice president of Fidelity National Title Co. in Dallas, has been kicking out e-mails and including the rate scale for the closing calculations.

“The people paying the fees would think it’s a good thing because their costs are going to go down,” Shea tells GlobeSt.com. But, the bottom line is it will cut into the reserves of doing business and ability to provide services, a fallout that is becoming more commonplace with the increasingly under-fire Texas insurance commission decisions. He points out that the bottom line for a $10-million transaction means title insurance would cost $45,585 instead of $48,494.

Chicago Title Insurance Co. vice president Ted Darby says it will be just fine “if you take care of your business properly. We should be able to ride out the downturn.” Darby says the insurance board inevitably will take another look down the road, once economic pressures ease and transactions go back up statewide. He expressed confidence “history will repeat itself” in the normal course of doing business and fee levels will be restored.