Title Insurance Regulatory and Legislative Update – April 2015

17 Apr

adapted from JDSupra Business Advisors

NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS

Title Guaranty Fund Guidelines Adopted: The Title Insurance Task Force met at the NAIC Spring National Meeting in Phoenix, Arizona and adopted the “Title Insurance Guaranty Association-Title Insurance Consumer Protection Fund Guideline” after receiving a report from  Title Insurance Guaranty Fund Working Group noting that no comments were received on the exposure draft of the guidelines by the March 20 deadline. The guidelines were also adopted following votes of the Receivership and Insolvency Task Force and Property and Casualty Insurance Committee.  The guidelines are now posted on the NAIC’s website and available for legislators and policy makers to consider as a template for the establishment of a state title insurance guaranty association.  Unlike certain model laws however, adoption of the guidelines is not an NAIC accreditation requirement.

New York

Report Foreshadows New Regulations Affecting Third Party Service Providers: The New York State Department of Financial Services recently released a report entitled “Update on Cyber Security in the Banking Sector: Third Party Service Providers”.  The report is the result of an October, 2014 survey of 40 banking organizations regulated by the department, and found potential cyber security vulnerabilities with banks’ third-party vendors.  Banks rely on third-party vendors for a broad-range of services and often have access to a financial institution’s information technology systems, providing a potential point of entry for hackers.  As a result of the report’s findings, the department is now considering regulations establishing cyber security requirements for financial institutions that would apply to their relationships with third-party service providers, including potential measures related to the representations and warranties banks receive about the cyber security protections those providers have in place.  These regulations could have a significant impact on third party service providers, including the title industry.

 

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