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F I S C A L I M P A C T R E P O R T

SPONSOR Stewart

ORIGINAL DATE

LAST UPDATED

2/8/08

HM 58

SHORT TITLE PRC Revisions to Title Insurance Law

SB

ANALYST Earnest

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

FY10

NFI

NFI

NFI

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of Bill

House Memorial 58 finds that

•

for the last ten years, the title insurance industry in New Mexico has earned profits that are

far in excess of the profit margins underlying the rates promulgated but the superintendent

of insurance

•

current statutes require all title insurers to charge uniform rates set by the superintendent;

•

the introduction of price competition may encourage title insurers to offer consumers and

lenders rates that are lower than those adopted by the superintendent of insurance;

•

the current statutory requirement that the superintendent conduct annual title insurance rate

hearings absorbs an inordinate amount of the limited resources of the insurance division of

the public regulation commission;

•

concerns have been raised that remedies available to property owners arising from negligent

title searches and examinations may be unreasonably limited by the New Mexico Title

Insurance Law;

•

the attorney general; the public regulation commission; the superintendent of insurance;

think New Mexico, a nonpartisan public policy group; the American association of retired

persons; the senior citizens' law office; the United States conference of Catholic bishops;

real estate groups; newspapers across the state; and other interested parties have stated the

need for revising the New Mexico Title Insurance Law;

Therefore, the memorial requests that the insurance division of the Public Regulation

Commission draft a comprehensive revision of the New Mexico Title Insurance Law and to

House Memorial 58 – Page

2

submit the proposed revision to the interim Legislative Finance Committee, the interim

Mortgage Finance Authority Act oversight committee and the governor;

FISCAL IMPLICATIONS

The fiscal implications are limited to the any administrative impact imposed on the Insurance

Division at the PRC.

SIGNIFICANT ISSUES

In the 2007 session, HM 80 was passed, requesting that PRC study current title insurance laws

and present its findings to the Legislature. The PRC Insurance Division contracted with UNM

Anderson School of Management to conduct a study of title insurance laws and markets in New

Mexico and surrounding states. This memorial builds on the work performed in 2007 to request

for recommendation for comprehensive title insurance reform.

Think NM, a nonprofit, nonpartisan, policy research organization has already made such a

recommendation. Based on those recommendations, Senate Bill 497 was introduced in the

current session.

BE/bb