Bulletin: TX000081

Dear Associates:

Reduction in the Basic Rate:  The Texas Insurance Commissioner has reduced Texas title insurance premium rates by 3.2% effective February 1, 2007.  For example, the minimum basic premium rate (for a $10,000 policy) is reduced from $237 to $229.  The basic premium for a $100,000 policy is reduced from $871 to $843.  This rate change applies to all policies with a policy date of February 1, 2007 or later. Please keep this in mind for closings at the end of the month of January if you will not file the documents until February 1 or later.  You should always promptly file the documents after the closing is completed and funding has occurred.

The Commissioner for the first time has approved endorsements for which he has specifically approved no premium.  The assignment of rents and leases endorsement (T-27) has been approved with no premium charge.  This endorsement is available only for commercial (non-residential) transactions.  The Condominium Endorsement (T-28) was approved at no charge.  Both endorsements will be available at $0.00 premium on February 1, 2007 and later. Please see our Guidelines for these endorsements in Bulletin TX000079.

Agenda Item 2004-51 was adopted which sets the rates for a T-19 (Mortgagee Policy) and a T-19.1 (Owner Policy) Restrictions, Encroachments and Minerals Endorsement as follows:

            T-19 on residential property: 5% of the premium for a single issue policy with a $25 minimum charge.

            T-19 on non-residential property: 10% of the premium for a single issue policy with a $25 minimum charge.

            T-19.1 on non-residential property: 15% of the premium for a single issue policy or 10% of the premium for a single issue policy if the area and boundary amendment is also being made.  In either event, the minimum charge is $25.00.

Rate Rule R-26 was amended to change the reference to the Preforeclosure forms in the rule from T-40 and T-41 to T-98 and T-99, respectively.

By way of an aside, we doubt that we or the TLTA will be suggesting any further endorsements that impose an extra burden or risk for the foreseeable future.

New rate cards will be available shortly.  Please contact either your district manager or our forms department in Houston to order forms. To review the Texas Title Insurance Premium Rate Chart, please visit stewarttexas.com.

For many years, expert witnesses have disagreed as to the existence and impact, if any, of reverse competition on Texas title insurance rates.  In finding #98, the Commissioner found as follows: "The evidence in the record supports a conclusion that reverse competition exists and has impacted title insurance expenses but does not adequately support any specific adjustment to report expenses."