First American Announces Agreement on Title Insurance Issues With N.Y. Attorney General
May 23, 2006, NEW YORK
First American Title Insurance Company of New York, a subsidiary of First American Title Insurance Company, today announced that it has reached an agreement with the New York State Attorney General and the New York State Insurance Department to resolve concerns that arose from an investigation into title insurance industry practices in that state.
This agreement provides clarification and better enforcement of state regulations, which First American welcomes, the company said.
The major terms of the agreement call for:
- The modification of several long-standing, industry-wide practices, including so-called blended rates as they have been applied to multi-state commercial transactions;
- An interim rate reduction of approximately 15 percent on title insurance for property purchases up to $1 million in value, pending review of rate issues by the New York State Insurance Department by year end;
- A fine of $2 million; and
- The establishment of a new Web site to better inform consumers about title insurance premiums and related information.
Under the agreement, the company acknowledged no wrongdoing. Neither the fines nor the rate reductions are expected to have a material impact on earnings of The First American Corporation.
First American Title Insurance Company, the largest subsidiary of The First American Corporation (NYSE: FAF), traces its history to 1889. One of the largest title insurers in the nation, the company offers title services through more than 1,800 offices and an extensive network of agents throughout the United States and abroad. The company has its headquarters in
Certain statements made in this press release, including those relating to the impact of the rate reductions on earnings, are forward-looking. Risks and uncertainties exist that may cause results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements include: interest rate fluctuations; changes in the performance of the real estate markets; limitations on access to public records and other data; general volatility in the capital markets; changes in applicable government regulations; heightened scrutiny by legislators and regulators of The First American Corporation’s title insurance and services segment and certain other of The First American Corporation’s businesses; consolidation among the company's significant customers and competitors; The First American Corporation’s continued ability to identify businesses to be acquired; changes in The First American Corporation’s ability to integrate businesses which it acquires; and other factors described in Part I, Item 1A of The First American Corporation’s Annual Report on Form 10-K for the year ended Dec. 31, 2005 and Part II, Item 1A of the The First American Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, in both cases as filed with the Securities and Exchange Commission. The forward-looking statements speak only as of the date they are made. The First American Corporation does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.