2021 Title Insurance Financial Survey/Overview

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2021 Title Insurance Financial Survey/Overview

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For reference, herewith is an updated schedule of "Suggested Maximum Risk" amounts for a cross section of U.S. title insurance companies. We welcome any title insurance company not listed that wishes to be included in future updates of this memorandum to provide us with their uniform statutory annual financial statements. The schedule is based on the insurers' financial reports to State regulatory agencies for the year ending December 31, 2020. The "Suggested Maximum Risk" is just that, a suggestion as to the most title insurance risk a particular insurance company may be allowed to retain on a given project or financing. In most instances, the title insurance companies can legally accept more risk (and would be happy to do so) and this schedule is intended only as one possible guideline for when it may be appropriate in larger transactions to consider diversifying the title insurance risk (by requiring coinsurance and/or reinsurance) based on the financial size of the companies involved.[*] The determination of when to require that such risk be diversified rests ultimately with the insured procuring title insurance and can appropriately take into account a number of factors beyond the scope of this memorandum, as further described below. The schedule indicates which insurers are affiliated companies, identifying the parent company under the heading "Corporate Group" where applicable. Particularly in larger transactions, real estate investors and lenders may prefer to treat one "Corporate Group" as a single insurer and require that risk be shared with unaffiliated companies through reinsurance and/or or co-insurance.

The fact that all title insurers are not equal was highlighted in 2020 with the liquidation of OneTitle National Guaranty Company, Inc. ("OneTitle"). OneTitle commenced operations in New York in 2014 and emphasized in its marketing that its premiums were less than other title insurers, based on a rate structure for which OneTitle had obtained approval of from the New York State Department of Financial Services ("DFS"). OneTitle struggled to gain acceptance in the marketplace. In 2020 DFS sought to liquidate OneTitle and on October 6, 2020 an order was entered in New York Supreme Court, New York County ordering such liquidation and terminating all existing title insurance policies issued by OneTitle (In re: OneTitle National Guaranty Company, Inc. (NYS Supreme Court, County of New York INDEX NO. 451834/2020)).

The "Suggested Maximum Risk" herein is simply one-third of a company's reported "Surplus as Regards Policyholders" and reflects a rule of thumb used by certain financial institutions in the past. The underlying data from which the figures herein were derived is from the December 31, 2020 financial statements filed with state regulators by the title insurance companies listed or their affiliates (copies furnished by the insurers). Schiff Hardin LLP makes no representation or warranty regarding the accuracy of that data or the relative merits of using the calculation of "Suggested Maximum Risk" contained herein versus other indicia of the relative financial characteristics of title insurance companies. In particular, we note that a number of title insurance companies, including companies in this survey, may be parties to reinsurance treaties with other entities (which may or may not be affiliates) which provide for ceding a portion of the covered risk, on a comprehensive basis as to all policies issued, and thereby allow the insurer to issue policies in higher amounts than such insurer's own individual financial characteristics would otherwise justify. Reliance on such reinsurance treaties may be an appropriate factor in deciding to exceed the "Suggested Maximum Risk" suggested herein, based on an evaluation and analysis of the terms of the actual contract, and the financial strength of the counterparty to the contract, both of which are beyond the scope of this memorandum. Information about any reinsurance treaties may be obtained directly from the title insurance companies themselves. The financial condition of the companies listed may have changed since the date of those financial statements, and persons concerned as to the current condition of any company should contact that company, state insurance regulators, and/or independent rating agencies that may evaluate their financial condition (rating agencies which cover title insurers include Demotech, Inc., A.M. Best Company, Inc., Fitch Ratings Ltd., Moody's Investors Services and Standard & Poor's, Inc.). Schiff Hardin LLP expressly disclaims any obligation to update this information for any reason. Schiff Hardin LLP does not provide financial advice and has compiled the information contained herein solely as a courtesy to its clients and other interested parties.

If you have questions regarding use of the suggested Maximum Risk schedule or other considerations in developing requirements for title coinsurance and/or reinsurance to diversify title insurance risk in transactions in which you are involved, please contact the undersigned or any member of the Real Estate practice group of Schiff Hardin.

[*] In New York, for example, the statute containing the legal limit on the amount a title insurance company can hold on any one policy takes into account statutory premium and voluntary reserves as well as reinsurance in place (see NY Insurance Law § 6403(c) ("(c) No title insurance corporation doing business in this state shall expose itself to any loss on any one risk in an amount exceeding the sum of its capital, surplus, statutory premium and any voluntary reserves, all as shown in its most recent quarterly or annual statement filed with the superintendent. Any risk or portion thereof which shall have been reinsured with an assuming insurer authorized to do such business in this state shall be deducted in determining the limitation of risk prescribed in this subsection. Credit to the ceding insurer for reinsurance with an unauthorized insurer shall be allowed to the extent permitted by a regulation of the superintendent.")


 

TITLE INSURANCE COMPANIES

Suggested Maximum Single Risk Amounts*

 

Company

Corporate Group

Suggested
Maximum Risk $

Alamo Title Insurance (TX) (NAIC #50598)

Fidelity National

$  8,000,000

American Guaranty Title Insurance Company (OK) (NAIC #51411)

Old Republic

11,600,000

AmTrust Title Insurance Company (NY) (NAIC #51578)[1]

N/A

$7,800,000

Attorney's Title Guaranty Fund, Inc. (CO) (NAIC #51560)

N/A

1,500,000

Attorney's Title Guaranty Fund, Inc. (IL) (NAIC #50004)

N/A

18,300,000

Chicago Title Insurance Company (FL) (NAIC #50229)[2]

Fidelity National

343,500,000

Commonwealth Land Title Insurance Company (FL) (NAIC #50083)

Fidelity National

134,400,000

Conestoga Title Insurance Co. (PA) (NAIC #51209)

N/A

4,300,000

Connecticut Attorneys Title Insurance Company (VT) (NAIC #51268)

N/A

11,900,000

Fidelity National Title Insurance Company (FL) (NAIC #51586)[3] [4]

Fidelity National

214,700,000

First American Title Insurance Company (NE) (NAIC #50814)[5]

First American

508,600,000

First American Title Insurance Company of Louisiana (LA) (NAIC #51527)

First American

8,300,000

First National Title Insurance Company (TX) (NAIC #14240)

N/A

12,300,000

First American Title Guaranty Company (TX) (f/k/a United General Title Insurance Company (CA)) (NAIC #51624)

First American

15,200,000

Investors Title Insurance Company (NC) (NAIC #50369)

Investors

38,300,000

National Investors Title Insurance Company (TX) (NAIC #50377)

Investors

5,100,000

National Title Insurance Company of New York Inc. (NY) (NAIC #51020)

Fidelity

15,300,000

North American Title Insurance Company (SC) (NAC #50130)[6]

North American

13,200,000

Ohio Bar Title Insurance Company (OH) (NAIC #51330)

First American

400,000

Old Republic National Title Insurance Company (FL) (NAIC #50520)[7]

Old Republic

204,900,000

Real Advantage Title Insurance Company (CA) (NAIC #50440)

N/A

4,000,000

Stewart Title Guaranty Company (TX) (NAIC #50121)

Stewart

264,900,000

Stewart Title Insurance Company (NY) (NAIC #51420)

Stewart

21,600,000

Title Resources Guaranty Company (TX) (NAIC #50016)

N/A

23,500,000

Westcor Land Title Insurance Company (SC) (NAIC #50050)[8]

N/A

36,100,000

WFG National Title Insurance Company (SC) (NAIC #51152)

WFG

28,400,000

 

For Further Information

The attorney responsible for content is Paul G. Mackey. If you would like to learn more about the subject matter of this memorandum, please contact any of the following attorneys of the Real Estate Group:

Brett Cooper

bcooper@schiffhardin.com

212-745-9551

William A. Goldman

wgoldman@schiffhardin.com

212-745-9546

Russel T. Hamilton

rhamilton@schiffhardin.com

212-745-0805

Tess Hofmann

thofmann@schiffhardin.com

212-745-9542

Janet M. Johnson

jjohnson@schiffhardin.com

312-258-5658

Paul G. Mackey

pmackey@schiffhardin.com

212-745-0816

Sean T. Maloney

smaloney@schiffhardin.com

312-258-5505

David A. Mandel

dmandel@schiffhardin.com

212-745-0834

James M. Murphy

jmurphy@schiffhardin.com

312-258-5530

Christine A. McGuinness

cmcguinness@schiffhardin.com

212-745-0831

Ivan W. Moskowitz

imoskowitz@schiffhardin.com

212-745-0875

Marina Rabinovich

mrabinovich@schiffhardin.com

212-745-0832

Felice B. Rose

frose@schiffhardin.com

312-258-5763

David S. Sattelberger

dsattelberger@schiffhardin.com

312-258-5574

 
 

* The "Suggested Maximum Risk" amount is one-third of each company's "Surplus as Regards Policy Holders" from the financial statements for the year ending December 31, 2020 which each insurer is required to file with the insurance regulators of the States where they do business, as provided by the companies. The "Suggested Maximum Risk" amounts are rounded to the nearest increment of $100,000.  Although many insurance companies are publicly traded corporations or subsidiaries of a publicly traded corporation, the state filings allow for comparison of the insurance companies themselves under generally consistent accounting methods. As with any large corporation, the financial statements of title insurance companies contain extensive and detailed information regarding the company's finances and there are any number of methods of evaluating a company's financial strength.

[1] AmTrust Title Insurance Company has advised that they object to the methodology for the 'rule of thumb' in this memorandum because it does not take into account reinsurance treaties that AmTrust Title has in place. Pursuant to NY Insurance Law § 6403(c) as noted above, reinsurance is a factor in determining the amount of risk a title insurance company is permitted to hold in the State of New York (as it is in a number of other states). More information regarding such reinsurance can be obtained directly from the company.

[2] In 2018 Fidelity National Financial, Inc., the parent company of the Fidelity National family insurance companies noted on this list, announced that it had signed an agreement to acquire Stewart Information Services Corporation, the parent company of the Stewart family title insurance companies noted on this list. In September of 2019, the Federal Trade Commission issued an administrative complaint seeking to block the merger, following which, on September 10, 2019 Fidelity National and Stewart terminated their merger agreement and no longer plan to merge.

[3] Re-Domesticated to Florida from California in 2017

[4] In 2018 Fidelity National Financial, Inc., the parent company of the Fidelity National family insurance companies noted on this list, announced that it had signed an agreement to acquire Stewart Information Services Corporation, the parent company of the Stewart family title insurance companies noted on this list. In September of 2019, the Federal Trade Commission issued an administrative complaint seeking to block the merger, following which, on September 10, 2019 Fidelity National and Stewart terminated their merger agreement and no longer plan to merge.

[5] First American Title Insurance Company was previously domiciled in California but redomesticated to Nebraska effective July 1, 2014

[6] Redomesticated from California to South Carolina on December 20, 2020

[7] Old Republic National Title Insurance Company was previously domiciled in Minnesota but redomesticated to Florida on November 25, 2014

[8] Redomesticated to South Carolina from California on March 7, 2018