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California insurance commissioner John Garamendi last month had once again butted heads with the title and escrow industries in the state.
The commissioner is proposing new regulations that he claims would save consumers up to $1 billion annually.
Among his proposals is to set "interim maximum rates" based on what title insurer rates were in November 2000. This, he said, would cause a 23% reduction in title insurance rates for a home purchase and a 16% reduction in title insurance rates for refinancings. It would also result in a 27% decrease in the cost of escrow services. The rate reduction is to go into effect on March 1, 2007.
He wants companies to report comprehensive data showing their costs and operations starting in 2008, so the then-insurance commissioner could determine a reasonable cost-based rate for title insurance.
The commissioner, under his proposal, will set a maximum amount that can be charged for title insurance and escrow fees. Mr. Garamendi's statement said that amount is expected to be well below current rates.
Mr. Garamendi, who is running for lieutenant governor of California, said he is basing this regulation on studies, which claim there is no competition for title insurance in...