Representatives of the title insurance industry regularly meet with officials from the Florida Office of Insurance Regulation (“OIR”) and the Florida Department of Financial Services (“DFS”) regarding the regulation of the industry. These meetings focus primarily on forms, rules, and related industry matters.
At a recent meeting, OIR officials focused comments on Sec. 626.9541(1)(a), F. S. That provision reads in pertinent part, "(1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE ACTS.− The following are defined as unfair methods of competition and unfair or deceptive acts or practices: (a) Misrepresentations and false advertising or insurance policies.− Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any . . . statement . . . which: 1. Misrepresents the benefits, advantages, conditions, or terms of any insurance policy."
OIR noted that some lender's general closing instructions require the title agent to make assurances about coverage that may not comply with Florida law, specifically Sec. 627.777, F.S., or Chapter 69O-186, F.A.C. Affirmative coverage was cited as an area of concern.
For example, one major lender requires in their general lender closing instructions the following:
Express affirmative coverage against loss is required in connection with each exception which adversely affects the property, such as easements, encroachments, violations of restrictions, common walls, overhang of eaves, porches, decks, roofs, etc.
OIR officials indicated that the title agent that assents to such a closing instruction and agrees to give affirmative coverage over any easement otherwise excepted on Schedule B is possibly misrepresenting the terms of the policy that will ultimately be issued to the lender because such coverage cannot be given.While the facts of a given title will control the final analysis, rarely are those available at the time the general loan closing instructions are presented. There was further discussion about the possibility that the requesting lender may violate the statute by making an inappropriate demand.
While we are unaware of any specific instances of enforcement by OIR or DFS against title agents or attorneys, OIR has taken this position against casualty insurance agents that alter a homeowner policy binder or Evidence of Property Insurance (“EPI”) to indicate to the lender that the policy covers "full replacement costs" or similar words that misrepresent the actual coverage.
The practice take away should be apparent. Pay attention to both general and special loan closing instructions and negotiate adjustments as appropriate. Failure to do so may result in substantial penalties under Sec. 626.9541, F.S. to both you and the requesting lender.
James C. Russick, V.P. Florida State & Gov’t Affairs
Counsel, Old Republic National Title Insurance Company
ActionLine Vol. XXXVII, No 1 Fall 2015
The US Supreme Court has upheld a key portion of President Barack Obama's healthcare law, preserving health insurance for millions of Americans.
In a 6-3 decision, the justices said that tax subsidies that make health insurance affordable for low-income individuals can continue.
The ruling preserves the law known as Obamacare, which Mr Obama considers a major part of his presidential legacy.
Republicans have vowed to continue fighting the law.
"We've got more work to do, but what we're not going to do is unravel what has now been woven into the fabric of America," Mr Obama said.
The case, known as King v Burwell, was the second major challenge the law has faced in the US's highest court.
Unlike in many other western countries, the US does not have a single-payer healthcare system. Private companies, rather than the US government, provide health insurance for US citizens.
The decision sparked celebrations outside the court in Washington
The enactment of the Affordable Care Act (ACA) - one of Mr Obama's most significant and controversial domestic achievements - in 2010 mandated that every American had to purchase private insurance. It provided the subsidies to allow many to do so.
In 2012, the mandate portion of the law was challenged in the court. The justices ruled to preserve it.
In that decision, as in the decision on Thursday, Chief Justice John Roberts surprised observers by siding with his liberal colleagues in support of the law.
"Congress passed the Affordable Care act to improve health insurance markets, not to destroy them," Chief Justice John Roberts wrote in the opinion.
Justice Anthony Kennedy dissented in 2012, but sided with the majority on Thursday.
Had the court made the opposite decision, an estimated 8.7 million people in the US would have been at risk of losing the aid that makes healthcare affordable.
Analysis - Jon Sopel, BBC North America editor
The stakes could not have been higher.
People's health (crucially important) and Obama's legacy (less important, but for him and those around him fairly vital) were at stake.
Well a politically finely balanced Supreme Court has given an emphatic, overwhelming vote in favour of the president by 6-3.
I bet "No-drama Obama" is high-fiving anyone and everyone in the White House - that is how big it is.
Obama defies lame-duck expectations
Demonstrators gathered outside the court as early on Thursday morning.
Reading updates on their mobile phones, the crowd became jubilant when they learned mid-morning that the court had ruled in their favour. Some began dancing, while others chanted "If you're covered and you know it clap your hands."
"This is a big sigh of relief for millions across the country," said Ron Pollack of Families USA, a health-care advocacy organisation. "The ACA is not just the law of the land, it will remain the law of the land".
"Today is a good day for healthcare in America," said activist Benton Strong. "I hope this is the end of the line."
Justice Antonin Scalia wrote in his dissent that the Supreme Court is setting a precedent of favouring some laws over others.
"We should start calling this law Scotuscare" Justice Scalia wrote, referring to the court's acronym. "Today's interpretation is not merely unnatural; it is unheard of."
Congressional Republicans have voted more than 50 times to undo the law.
House Speaker John Boehner said that they will continue their "efforts to repeal the law and replace it with patient-centred solutions that meet the needs of seniors, small business owners, and middle-class families".
Following the enactment of the ACA in 2010, states were given the option of establishing their own healthcare exchanges - online marketplaces for citizens to buy health coverage.
Citizens in states that refused to establish exchanges could shop for coverage on a federal exchange.
Media captionPresident Obama hailed the decision saying the Affordable Healthcare Act was "here to stay"
Rep Steve Scalise described the ACA as a "dismal failure" and vowed to continue fighting it
In the court, opponents argued that a phrase included in the law, "established by the state," meant the federal government could only provide subsidies to people in states that set up their own exchanges.
However, most Americans receiving subsidies purchase healthcare through the federal exchange, after many states decided not to set up their own marketplaces. Only 13 states and Washington DC have set up their own exchanges.
The Obama administration argued that was a too-narrow reading of the law, which spans nearly 1,000 pages, and the rest of the legislation makes clear subsidies are intended for those who meet income requirements, regardless of which exchange insurance was purchased from.
Obamacare by the numbers
citizens in 37 states depend on federal subsidies to make healthcare affordable
only 13 states and Washington, DC have established their own exchanges
over 10m people have purchased coverage through one of the new exchanges - federal or state
on average, the federal government provides a $272 (£173) monthly subsidy
The upholding of the law cements President Obama's biggest legislative victory. Limiting the subsidies could have unravelled Mr Obama's signature healthcare reforms.
Republican Congressional leader Steve Scalise said he was disappointed with the ruling and would work to have the law "repealed and replaced," echoing near-universal Republican sentiment.
"It does not change the fact that Obamacare has been a dismal failure for millions of Americans who have lost the good healthcare that they liked, and are paying more for the plans that they have," Mr Scalise said in statement.
(Bloomberg) -- The U.S. Supreme Court said people who file housing-discrimination suits don’t have to show they were victims of intentional bias, in a blow to lenders and insurers and a surprise legal victory for the Obama administration.
The 5-4 ruling upholds a category of U.S. Fair Housing Act lawsuits that civil rights groups said are especially important -- and business groups consider particularly onerous. The court said plaintiffs can base their suits on statistical evidence that a disputed policy has a “disparate impact” on a minority group.
The Obama administration has relied on the disparate-impact approach to get hundreds of millions of dollars in fair-lending settlements with Bank of America Corp., Wells Fargo & Co. and other financial companies.
“Recognition of disparate impact claims is consistent with FHA’s central purpose,” Justice Anthony Kennedy wrote for the court. The law was “enacted to eradicate discriminatory practices within a sector of our nation’s economy.”
Kennedy said disparate-impact cases should be “properly limited” so that those sued under the law have an opportunity to argue that their policies serve valid interests. He warned against the risk of “abusive” impact claims that could cause private developers to not construct low-income housing.
“Then the FHA would have undermined its own purpose as well as the free-market system,” Kennedy said.
The ruling defied expectations. The court under Chief Justice John Roberts had eliminated decades-old protections for racial minorities in other contexts, and the justices had given every indication that disparate-impact suits were next.
Housing and Urban Development Secretary Julian Castro applauded the court’s decision, saying it protects equal opportunity for Americans.
“The Supreme Court has made it clear that HUD can continue to use this critical tool to eliminate the unfair barriers that have deferred and derailed too many dreams,” Castro said in a statement.
The decision was also praised by housing advocates. John Taylor, president of the National Community Reinvestment Coalition, said disparate-impact claims are a vital tool for enforcing fair-housing laws.
“For many years, the application of disparate-impact doctrine has helped to expose housing practices that may appear neutral on their face but have discriminatory effects on protected classes,” Taylor said.
The court took up the case in October even though the issue appeared settled, with every federal appeals court that considered the matter saying that disparate-impact suits were allowed. The court had to grant review in three cases before having a chance to rule. Two other cases accepted earlier were scuttled when civil rights advocates engineered settlements.
The ruling may also apply to the Equal Credit Opportunity Act, a second law invoked by the Obama administration against Bank of America and Wells Fargo.
The Consumer Financial Protection Bureau has relied on the disparate-impact doctrine in enforcing that law, which contains language similar to that in the Fair Housing Act. ECOA, as the law is known, covers auto lending as well as mortgages.
The decision is negative for mortgage and subprime auto lenders and allows the Justice Department and the CFPB to use disparate-impact claims under the ECOA, analysts at FBR & Co. said in a research note.
Justice Samuel Alito, in a dissent joined by the chief justice as well as Justices Antonin Scalia and Clarence Thomas, said the housing law prohibits only intentional discrimination, not practices that have only an adverse effect. The majority’s opinion will have “unfortunate consequences” for those the law is designed to help, Alito said.
“Disparate impact puts housing authorities in a very difficult position because programs that are designed and implemented to help the poor can provide the grounds for a disparate-impact claim,” he wrote.
That view was echoed by the American Bankers Association, which criticized the decision and said it wouldn’t prevent discrimination in lending.
“This approach can have unintended consequences, such as causing financial institutions to shrink their operations rather than risk litigation, hurting the very groups it is intended to help,” ABA President Frank Keating said in a statement.
In the case before the court, Texas was fighting a lawsuit by the Inclusive Communities Project, a Dallas-based group that advocates for racially integrated housing. The organization accused state officials of thwarting integration by allocating a disproportionate number of federal low-income housing tax credits to minority neighborhoods.
A federal appeals court had said the lawsuit could go forward.
Texas Attorney General Ken Paxton said in a statement that the high court decision “places an unfair burden on landlords, lenders and developers, and will ironically lead them to make their decisions based upon consideration of race.”
The case is Texas Department of Housing v. Inclusive Communities Project, 13-1371.
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