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DEPARTMENT OF INSURANCE, SECURITIES AND BANKING
NOTICE OF FINAL RULEMAKING
The Acting Commissioner of the Department of Insurance, Securities and Banking, pursuant to the authority set forth in section 2164 of the Fiscal Year 2011 Budget Support Act of 2010, effective September 24, 2010 (D.C. Law 18-223; 57 DCR 6242) (“Title Insurance Insurer Act of 2010”), hereby gives notice of the adoption of an amendment of Subtitle A, “Insurance,” of Title 26 of the District of Columbia Municipal Regulations (DCMR) by adding a new chapter 41 entitled “Title Insurance Rate Making”. The new chapter 41 will establish the rate making and filing requirements for title insurers.
A Notice of the Emergency and Proposed Rulemaking was published in the D.C. Register on December 24, 2010, at 57 DCR 12276. The Notice of Emergency and Proposed Rulemaking originally indicated that the new “Title Insurance Rate Making” chapter would be placed in chapter 40. Chapter 40 is currently exists in Subtitle A of Title 26. Therefore, as a technical amendment, the rulemaking was renumbered from chapter 40 to chapter 41. No substantive changes were made to the rulemaking. The rules shall become effective upon the publication in the D.C. Register.
Subtitle A, INSURANCE, of Title 26 of the District of Columbia Municipal Regulations is amended as follows:
A new chapter 41, TITLE INSURANCE RATE MAKING, is added to read as follows:
CHAPTER 41 TITLE INSURANCE RATE MAKING
4101 SCOPE OF CHAPTER
4101.1 This chapter applies to all kinds and classes of insurance that insure or guarantee:
(a) Titles to real or leasehold property or an estate in real or leasehold property;
(b) Against loss by reason of defects, encumbrances, liens, or charges on real or leasehold property or an estate in real or leasehold property;
(c) The validity, priority, and status of liens on real or leasehold property or an estate in real or leasehold property; or
(d) The correctness and sufficiency of searches for instruments, liens, charges, or other matters affecting the title to real or leasehold property or an estate in real or leasehold property.
4101.2 This chapter applies to a person that makes guarantees or issues insurance described in subsection 4101.1(a) of this section.
4102 INTERIM USE OF RATES
4102.1 Notwithstanding any other provision of this chapter, title insurers may use the premium rate schedules in effect prior to the applicability date of the Fiscal Year 2011 Budget Support Act of 2010, effective September 24, 2010 (D.C. Law 18-223; 57 DCR 6242) (“Title Insurance Insurer Act of 2010”) on an interim basis until March 31, 2011.
4103.1 All title insurance rates shall be made in accordance with this section.
4103.2 Rates shall be reasonable and adequate for the class of risks to which they apply.
4103.3 Rates may not discriminate unfairly between risks that involve essentially the same hazards and expense elements.
4103.4 Due consideration shall be given to:
(a) Past and prospective loss experience within and outside the District;
(b) A reasonable margin for profit and contingencies;
(c) The cost of participating insurance;
(d) The percentage to be allocated to reserve;
(e) Past and prospective operating expenses; and
(f) All other relevant factors fairly attributable to the business of title insurance within and outside of the District.
4103.5 Guarantees may be grouped by classifications for the establishment of rates and
minimum premiums.
4103.6 A special or unusual guarantee that is more hazardous to the title insurer than
ordinary title guarantees because of an alleged irregularity or a difference in
interpretation or application of law that might affect marketability of title, may be
classified individually and separately according to the circumstances peculiar to
each case.
4104 RATE FILINGS
4104.1 Except as otherwise provided in this subsection, each title insurer shall file with
the Commissioner all rates or premiums, and supplementary rate information that
it proposes to use.
4104.2 A filing is not required for rates or premiums for a special or unusual guarantee as
described in subsection 4103.6.
4104.3 Each filing shall indicate the character or extent of coverage contemplated under the rates and premiums for which it is made.
4104.4 A title insurer may not make a change in rates or premiums or in the forms of contracts, policies, or guarantees of insurance unless a report that indicates the change has been filed with and approved by the Commissioner.
4105 APPROVAL OR DISAPPROVAL OF FILINGS
4105.1 Unless the Commissioner finds that a filing does not meet the requirements of this
chapter, or is otherwise contrary to other applicable law, the Commissioner shall
approve the filing.
4105.2 If the Commissioner approves a filing prior to the waiting period in subsection
4105.4, or disapproves a filing, such action must be made in writing.
4105.3 If the Commissioner disapproves a filing, the Commissioner shall specify how the
filing fails to meet the requirements of this chapter or is otherwise contrary to
other applicable law.
4105.4 If a filing is not disapproved by the Commissioner within thirty (30) days after the date of filing, or within forty-five (45) days after the date of filing if the Commissioner extends the waiting period in writing during the initial thirty (30) day period, the filing is deemed approved and the effective date of the filing is the end of the thirty (30) day or forty-five (45) day waiting period.
4105.5 The Commissioner shall have the authority to investigate and hold a hearing to
review rate filings on the same basis as, and in accordance with, the provisions
found in § 4 of An Act To provide regulation of certain insurance rates in the
District of Columbia, and for other purposes, approved May 20, 1948 (D.C.
Official Code § 31-2704; 62 Stat. 243).
4105.6 In determining the necessity for an adjustment of title insurance rates, the
Commissioner shall be bound by the provisions of this chapter or other applicable
law.
4106 FINANCIAL DATA AND OTHER INFORMATION
4106.1 Each title insurer subject to this chapter shall provide to the Commissioner on a uniform basis financial data and any other information that the Commissioner requires in the regulation of rates.
4106.2 The financial data to be provided shall include:
(a) Rates, taxes, general expenses, allocated and unallocated loss adjustment expenses, licenses, and fees; and
(b) All other expenses that relate to the procurement of business not specifically listed as commissions, including dividends, retainers, stock, office space, and any other valuable consideration.
4106.3 The information to be provided under this section shall be supplied on forms provided or approved by the Commissioner.
4107 EXCHANGE OF INFORMATION AND EXPERIENCE DATA
4107.1 To further more equitable establishment and adjustment of rates and premiums and forms of contracts, policies, or guarantees of insurance, the Commissioner and each title insurer may:
(a) Exchange information and experience data with each other, with insurance regulatory officials and insurers in other states, and with national organizations and associations, including the National Association of Insurance Commissioners; and
(b) Consult and cooperate with each other about rate and premium making and forms of contracts, policies, and guarantees of insurance.
4108 PROHIBITED CONTRACTS, POLICIES, AND GUARANTEES OF INSURANCE; COMMISSIONS AUTHORIZED
4108.1 A title insurer may not make or issue a contract, policy, or guarantee of insurance except in accordance with filings approved as provided in this chapter.
4108.2 Each title insurer shall use the rates or premiums as approved by the Commissioner and may not deviate from the rates or premiums or allow to or for the account of an insured a rebate or discount on the rates or premiums payable.
4108.3 A title insurer may pay or allow a commission to a licensed insurance producer of the title insurer as compensation for procuring business.
4109 FALSE OR MISLEADING INFORMATION
4109.1 A person may not knowingly give false or misleading information to the Commissioner, an insurer, or another person if the information will affect the proper determination of rates or premiums or the proper issuance of a contract, policy, or guarantee of insurance.
4110 PENALTIES
4110.1 The Commissioner may impose any administrative penalty authorized under, and in accordance with, the Title Insurance Insurer Act of 2010.
