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May 28, 2009 Timothy Cox, President & CEO of Founders Land Transfer, Inc. and Co-Chair of The Magellan Group’s Public Affairs Committee, testified today before the Pennsylvania Department of Insurance Business Wire – May 28, 2009. Timothy Cox, President & CEO of Founders Land Transfer, Inc. and Co-Chair of The Magellan Group’s Public Affairs Committee, testified today before the Pennsylvania Department of Insurance to correct PA Attorney General, Tom Corbett’s misunderstanding of the land title insurance industry and title conveyance processes. Among other items, Mr. Cox directly testified that the land title insurance industry, unlike that of property casualty & life insurance industries, sustains much of its operating costs (almost 90%) on the “front end” costs associated with searching, preparing, and clearing of title vs. that of the property casualty & life insurance industries, which only sustains actual costs in the event of claims being filed. “The fact that the land title insurance industry practices a philosophy of ‘risk avoidance’ vs. that of ‘risk assumption’, clearly distinguishes the fundamental differences in these types of insurances”. Mr. Cox also testified that the growing presence of “Affiliated Business Arrangements” & “Controlled Business Arrangements” (ABA’s & CBA’s) represented conflicts of interest, significant reverse and limited competition, and now directly threatens the independence of the land title insurance industry and its ability to be the last line of defense against fraud & predatory practices. Mr. Cox specifically cited quantitative research indicating that ABA’s & CBA’s represent a direct threat to Public Interest and Consumer protections. “Similar to the recent changes adopted May 1, 2009 by Fannie Mae and Freddie Mac titled “Home Valuation Code of Conduct” (which among other things removes the ‘relationships’ or ‘influences’ lenders and/or mortgage brokers have with appraisers), government agencies must “separate” the material parties and their relationships involved in real estate transactions”. |
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