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State senate passes bill favoring the title insurance industry. Here’s what happens next
Bill claims Department Financial Services overstepped its authority by imposing new rules
The New York State Senate has passed another bill attacking strict new regulations on the title insurance industry.
The bill, sponsored by Sen. Marty Golden (R-Brooklyn), essentially says that the Department of Financial Services vastly overstepped its authority when it imposed new rules on the title insurance industry earlier this year. It states that the agency does not have the power to levy fees for “ancillary or discretionary non-insurance services” that title insurance companies provide.
DFS did not respond to a request for comment.
The Senate approved the bill on Wednesday. It will go to the Assembly next, although the chamber is not expected to act on it anytime soon. Assemblyman Kevin Cahill (D-Dutchess), chair of the insurance committee, previously told The Real Deal they were working on their own title insurance legislation that will likely not be ready until the next legislative session.
DFS levied new regulations on the title insurance industry earlier this year in the wake of an investigation finding that agents and companies spent millions of dollars on entertaining clients and ultimately charged this money back to consumers. The new rules ban companies from providing clients with meals and beverages, entertainment, vacations, outings and parties.
The title insurance industry has fought back hard against these regulations and is currently in the middle of a lawsuit over them against DFS. The suit argues that the rules are wreaking havoc on the industry and that DFS did not have the authority to implement them.
New York State Supreme Court Judge Eileen Rakower heard oral arguments for the lawsuit on Thursday and said she would issue a ruling on the case within 30 days.
Wednesday’s bill is not the first time the state Senate, which is effectively controlled by Republicans, has shown its support for the title insurance industry following the new regulations.
In January, the chamber unanimously passed a bill that would allow companies to resume taking clients out to lunch, buying them coffee or treating them to a round of golf. Members also included language in their proposed budget for fiscal year 2018-19 that would roll back some of the regulations.