ALTA Concurs With California Judge's Ruling to Uphold Cease and Desist Order Against Radian Guaranty.Business Editors/Legal Writers WASHINGTON, D.C.--(BUSINESS WIRE)--Feb. 13, 2003 Ruling Calls Radian ra·di·an n. Abbr. rad A unit of angular measure equal to the angle subtended at the center of a circle by an arc equal in length to the radius of the circle. Lien Protection Policy, "Title Insurance Masquerading 1. (networking) masquerading - "NAT" (Linux kernel name). 2. (messaging) masquerading - Hiding the names of internal e-mail client and gateway machines from the outside world by rewriting the "From" address and other headers as the message leaves the as Mortgage Guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant. Insurance" The American Land Title Association The American Land Title Association or ALTA, is a national trade association representing the interests of the abstract of title and title insurance industries. In addition to active members engaged in the title industry, associate members cover a wide range of businesses (ALTA), the national trade association for the title insurance industry, today commended California Administrative Law Judge administrative law judge n. a professional hearing officer who works for the government to preside over hearings and appeals involving governmental agencies. They are generally experienced in the particular subject matter of the agency involved or of several agencies. , Leonard L. Scott, in his ruling made public last week upholding the Cease and Desist Order An order issued by an Administrative Agency or a court proscribing a person or a business entity from continuing a particular course of conduct. The force and effect of a cease and desist order are similar to those of an Injunction issued by a court. issued last June by the Department of Insurance barring Radian Guaranty Inc. and Amerin Guaranty Corp. from selling unlicensed title insurance in the state. Radian appealed the order claiming its product, Radian Lien Protection (RLP RLP Rheinland-Pfalz (state in Germany) RLP Resource Location Protocol (Cisco) RLP Radio Link Protocol RLP Remote Line Printer RLP Revolving Loan Program RLP Rotatable Log Periodic ), is a form of mortgage guaranty insurance. Judge Scott strongly disagreed, calling the RLP policy "title insurance masquerading as mortgage guaranty insurance." "We have stated emphatically that the RLP is a form of title insurance, and any company issuing title insurance must be properly licensed and regulated to do so," said James Maher, executive vice president, ALTA. "This important ruling against Radian serves as a legal blueprint for other states to use in dealing with insurance companies attempting to skirt the law by selling unlicensed, unregulated title insurance products that are misleading and might ultimately threaten consumer protection." The California Insurance Code clearly defines the three separate classes of insurance that protect buyers and lenders in real estate transactions: title insurance, mortgage insurance and mortgage guaranty insurance. Each class is defined and regulated by the statutory scheme to protect against a separate and distinct type of risk. Those admitted to sell one of the three classes of insurance are prohibited from selling either of the other two classes or any other type of insurance. As a result, when Radian and Amerin issued the RLP policy, they violated the monoline requirements of the California Insurance Code. In his final ruling, Judge Scott referred to the distinct difference between title insurance and mortgage guaranty insurance, as described in the monoline provisions of the California statutory scheme: title insurance protects the buyer or lender against loss due to undiscovered liens and encumbrances that exist before the close of escrow, whereas mortgage guaranty insurance protects the lender against future defaults on the loan by the buyer. Radian and Amerin are only authorized to transact mortgage guaranty insurance in California; however, the RLP policy provides coverage for losses from undisclosed liens, which constitute "a pre-existing risk which is normally the province of title insurance policies," according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the ruling. "We believe Judge Scott's logic in determining that the RLP policy violates a number of provisions in the California Insurance Code was very thorough and precise," said Maher. "We are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that Commissioner Garamendi will concur with Judge Scott's decision and uphold the Department's Cease and Desist order against Radian." To view the complete text of Judge Scott's ruling, visit ALTA's Web site at http://www.alta.org. About ALTA The American Land Title Association represents title insurance companies and their agencies nationwide on a variety of industry and legislative issues. Members of the Association search and insure land titles to protect real estate investors A real estate investor is someone who actively or passively invests in real estate. An active investor may buy a property, make repairs and/or improvements to the property, and sell it later for a profit. including homebuyers and mortgage lenders. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion