No. 30711: R590-153. Unfair Inducements and Marketing Practices in Obtaining Title Insurance Business

DAR File No.: 30711
Filed: 11/09/2007, 11:08
Received by: NL

NOTICE OF REVIEW AND STATEMENT OF CONTINUATION

Concise explanation of the particular statutory provisions under which the rule is enacted and how these provisions authorize or require the rule:

Subsection 31A-2-201(3) gives the commissioner the authority to make rules to implement the provisions of Title 31A. Subsection 31A-23-302(8) gives the commissioner the authority to make rules, after a finding, to define unfair, deceptive, discriminatory or misleading marketing practices. Sections R590-153-5 and R590-153-6 of this rule specify material and unfair inducement to obtaining title insurance business and what constitutes an unfair method of competition in the business of title insurance.

Summary of written comments received during and since the last five-year review of the rule from interested persons supporting or opposing the rule:

This rule has been revised a number of times over the past five years. Changes were put into effect 01/13/2004 after going through three comment periods and one hearing. On 08/08/2007, changes to this rule were again put into effect after a comment period. During the latter comment period, no comments were received. During the 2003 and 2004 comment periods, many comments were received but none during the last comment period. The department tried to work with the title industry to accommodate their needs without adversely impacting the public good. It should be noted that the department, Title and Escrow Commissioner, and members of the industry and public are in the process of revising this rule now. It needs to be updated to adapt to the changing environment in the title and escrow industry.

Reasoned justification for continuation of the rule, including reasons why the agency disagrees with comments in opposition to the rule, if any:

This rule is supportive of title insurance agencies and the public. Real estate agents and mortgage brokers make many requests of title agencies to provide marketing materials, food, education, etc., at the cost of the title agency. These costs are then passed on to the consumer. Without regulation, title agencies would be asked to provide services and goods other than those related to title services in an effort to compete for business. Therefore, this rule should be continued.

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Administration
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY UT 84114-1201

Direct questions regarding this rule to:

Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [e-mail]

Authorized by:

Jilene Whitby, Information Specialist