Robertson v. Ticor Title Ins. Co. of Florida (IN)


Summary: Title insurance companies are responsible for ensuring that their agents are charging a premium rate that is in accordance with Indiana’s Statutory Rate Standard.


Robertson v. Ticor Title Ins. Co. of Florida, 982 N.E.2d 9 (Ind. Ct. App. 2012).


Facts: The Indiana Department of Insurance (IDOI) began a target market examination of Ticor Title Insurance Company of Florida (Ticor). IDOI appointed Noble Consulting Services (Noble) to examine Ticor. Noble found a variety of issues including (1) a lack of oversight of Ticor’s agents, (2) higher premium rates being charged than the contracted rates, (3) insufficient controls to ensure agents charge in accordance to Ticor’s rate book, (4) failure to audit agents to ensure accuracy to premium remittances, (5) failure to identify premium remittance as a key risk area, (6) failure to determine accuracy of premium remittance, (7) failure to audit its agents to ensure RESPA compliance, (8) violation of Indiana law by charging inconsistent premium rates, and (9) Ticor’s internal controls should ensure agents charge consistent premium rates.

Noble looked at the business practices of the three main companies operating under a limited agency agreement with Ticor. Noble concluded that all three agencies charged premiums that where higher than what their agency contracts with Ticor mandated (which required them to charge in accordance with Ticor’s rate book). Furthermore, the companies were allowed to use different rate books to calculate premiums, so that different rates were paid for the same coverage, which violated Indiana Code §§ 27-4-1 and §§27-1-18-2. Of the three agencies, one bundled the premium rate with other settlement services on the HUD forms. Noble further found that the agents regularly violated RESPA by not itemizing the settlement charges on the HUD settlement statements.

A hearing officer for the IDOI found that the companies under a limited agency contract with Ticor were not agents of Ticor for the purposes of RESPA compliance but were agents of Ticor for the purposes of charging premiums, collecting premiums, and paying premium taxes. The officer concluded that Ticor allowed its agents to charge premiums that were excessive and discriminatory and that Ticor did not have adequate internal controls. The officer further held that Ticor failed to pay the premium tax on scheduled premiums collected by agents. Ticor was ordered to refund excessive premiums, to require its agents to charge the scheduled amount, to establish an internal control process to ensure the premiums were appropriate, to pay a fine, and to pay unpaid premium taxes.

Ticor filed a Verified Petition for Judicial Review of the Administrative Order. The trial court reversed the IDOI’s administrative order. It held that Noble’s testing methodology for the company that bundled premiums and settlement charges was flawed. The trial court further held that the IDOI incorrectly analyzed Indiana Code section 27-4-1-4 and that the Statutory Rate Standard is a cost-based standard and therefore doesn’t mandate the same rates for the same coverage. This means reasonableness could not be determined without an examination of the cost. Furthermore, charges that differed from the rate book were not per se discriminatory. The trial court also found that the premium tax was incorrectly calculated because it included settlement charges. The court then set aside the administrative order and ordered the IDOI to refund the premium tax and interest payment and remanded the case for further proceedings. The IDOI appealed.


Holding: Reversed and remanded for further proceedings. While the IDOI and the trial court had different interpretations of the Rate Statute, the interpretation by the administrative agency is entitled to great weight unless it is inconsistent with the statute itself. The statute merely prohibits unfair discrimination. In this instance, both Ticor’s operating procedures and the National Association of Insurance Commissioners’s (NAIC) standards support the IDOI’s interpretation. For these reasons, the court held that the IDOI’s interpretation was reasonable.

Ticor would accept the amount reported or remitted by the agent as the actual premium and failed to determine if this was the price that was actually charged. Ensuring that the remitted amount was in accordance with the schedule is not enough to guarantee that the premium charge was the correct amount. Ticor failed to comply with the Rate Statute by permitting its agents to charge Indiana consumers more than their rate schedule and allowing the agents to charge different premium rates for consumers that are in the same class and have the same risk. For these reasons, the holding of the trial court is reversed and the order of the IDOI is reinstated.


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By: ATG Underwriting Department | Posted on: Thu, 05/16/2013 - 5:26pm