The Department of Financial Services has officially appealed the New York State Supreme Court ruling that annulled its strict anti-marketing regulations on title insurance companies.
DFS filed its case with the Appellate Division of the New York State Supreme Court on Monday, arguing that Judge Eileen Rakower’s decision to overturn its regulations in July “rested on multiple errors of law.”
The state wrote that Rakower’s ruling misread New York’s ban on inducements to conclude that it only prohibits title insurers from giving real estate professionals economic benefits like rebates and commissions rather than anything of value.
This led the court “to the absurd conclusion that DFS has no authority to prevent title insurers and agents from giving real estate professionals plainly valuable benefits such as lavish gifts, meals, and entertainment,” the appeal reads.
DFS also argues that the court ignored the administrative record it had compiled to support its new restrictions and gave “no deference whatsoever” to the agency “despite DFS’s expertise in this complex field.” It maintains that the appellate court should reinstate its rules.
The New York State Land Title Association, Great American Title Agency and Venture Title Agency filed suit against DFS over its new title insurance regulations in February. Their attorney, Mylan Denerstein, did not immediately respond to a request for comment about the appeal.
Rakower sided with the title insurance industry in her ruling on the regulations’ legitimacy, writing that New York’s law was not meant to ban the companies from ordinary entertainment and marketing expenses. DFS Superintendent Maria Vullo said the agency planned to appeal her decision almost immediately after.