HOUSTON (July 1, 2009) – The New Mexico Superintendent of Insurance announced June 30, 2009, that effective August 1, 2009, real estate title insurance premiums would rise by 10.7 percent overall. Additionally, the remittance rates from title agencies to underwriters increased from 19 percent to 20 percent for residential properties. A new rate schedule has yet to be released.
This ruling was based on findings of pre-filed testimony, direct testimony, facts of law and a rate hearing held in November 2008 and a final information hearing in the first week of June 2009. Testimony was received from consumer, regulatory and industry sources, and the New Mexico Attorney General's Office on behalf of consumers.
The findings stated, "The Superintendent has the responsibility to promulgate the premium rates of title insurers and title insurance agents for title insurance policies and the percentage of premium to be retained by title insurers. Premium rates promulgated by the superintendent shall not be excessive, inadequate or unfairly discriminatory and shall contain an allowance permitting a profit that is not unreasonable in relation to the riskiness of the business of title insurance."
"After several years of increasing expenses, rising claims and declining real estate prices that reduce revenue, we are pleased with the findings of the New Mexico Superintendent of Insurance," said Mike Skalka, president, Stewart Title Guaranty Company. "This increase will provide the financial input necessary to properly reduce risks inherent in real estate transfers and to insure the results of that work and maintain the necessary reserves and underwriter strength to defend policyholders and pay future claims. New Mexico title consumers can be assured their real estate ownership is protected by their title policies."
"Good news for consumers, the regulators in the non-rate portion of the findings adopted the New Mexico Land Title Association's proposal to shorten the number of standard boiler-plate exceptions on everyone's title commitment by one-third in order to create a title policy that was less complex, more transparent, and offering consumers greater protection,” said Stephen J. Rhodes, Vice President and New Mexico Underwriting Counsel for Stewart Title Guaranty Company.
"The actions and leadership of the New Mexico Superintendent of Insurance are indicative of the critical recognition and importance of maintaining strength, liquidity and the ultimate protection of consumer's real estate investments," said Malcolm S. Morris, chairman and co-chief executive officer for Stewart Information Services Corp. "The home represents the major store of wealth for more than half of American households. We congratulate the Superintendent's efforts in protecting the ownership of their real estate holdings, in maintaining underwriter strength and growing surplus."
"We believe these results are leading indicators of other states' current reviews of title insurance industry and the need to assure consumers of their ownership rights in real property," added Morris. "In non-regulated states, Stewart has been actively increasing our title rates. Critical in these rulings is the recognition of market cycles and the need to maintain a strong title industry throughout economic cycles."
Stewart Information Services Corp. (NYSE-STC) is a customer-driven, technology-enabled, strategically competitive, real estate information, title insurance and transaction management company. Stewart provides title insurance and related information services required for settlement by the real estate and mortgage industries throughout offices in the United States and international markets. Stewart also provides post-closing lender services, automated county clerk land records, property ownership mapping, geographic information systems, property information reports, flood certificates, document preparation, background checks and expertise in tax-deferred exchanges. More information can be found at http://www.stewart.com.
Forward-looking statements. Certain statements in this news release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to future, not past, events and often address our expected future business and financial performance. These statements often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," 'will' or other similar words. Forward-looking statements by their nature are subject to various risks and uncertainties that could cause our actual results to be materially different than those expressed in the forward-looking statements. These risks and uncertainties include, among other things, the severity and duration of current financial and economic conditions, the impact of recent significant decreases in the level of real estate activity, continued weakness or further adverse changes in the level of real estate activity, our ability to respond to and implement technology changes, the impact of unanticipated title losses on the need to further strengthen our policy loss reserves, any effect of title losses on our cash flows and financial condition, the impact of changes in governmental and insurance regulations, our dependence on our operating subsidiaries as a source of cash flow, the realization of expected expense savings resulting from our expense reduction steps taken in 2008, our ability to access the equity and debt financing markets, our ability to grow our international operations, and our ability to respond to the actions of our competitors. These risks and uncertainties, as well as others, are discussed in more detail in our documents filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2008 and our Current Reports on Form 8-K. We expressly disclaim any obligation to update any forward-looking statements contained in this news release to reflect events or circumstances that may arise after the date hereof, except as may be required by applicable law.
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