- February 01, 1998
- All Maryland Policy Issuing Agents
- Maryland Affordable Housing Trust (MAHT); Compliance Fee Prohibition
The Maryland Insurance Administration has issued the attached "Notice and Order" informing the title insurance agents that they may not charge a MAHT "compliance fee" to borrowers in connection with settlements. Read and digest the attached notice. It is our understanding that the Maryland Insurance Administration is revisiting this issue since the COMAR regulations do not prohibit a "compliance fee" and the issue is centered more on where the placement of such a fee would or should appear (e.g. not under the government charges section but under either misc. or title sections of the HUD-1).
Address any questions to the State Counsel in Baltimore.
MARYLAND INSURANCE ADMINISTRATION
NOTICE AND ORDER
Notice and Order No. MIA-186-10/97
This Notice and Order applies to title insurance insurers, title insurance agents and title insurance brokers. It has come to the attention of the Maryland Insurance Administration that title agents and brokers are charging consumers a Maryland Affordable Housing Trust ("MAHT") compliance fee in connection with settlements conducted by them. The agents are either actually or implicitly indicating to the consumers that this is a governmentally imposed fee. The charge for the MAHT compliance fee is being placed in the 1200 section of the HUD settlement form which seems to indicate that this is a governmentally imposed expense. There is no governmentally imposed MAHT compliance fee and as such agents are prohibited from charging such fee. In accordance with the powers and duties of the Maryland Insurance Commissioner under §§ 24 and 29 of Article 48A of the Annotated Code of Maryland, the Insurance Commissioner notifies all authorized title insurance insurers, title agents and brokers that it is a violation of the Insurance Code to charge any MAHT compliance fee.
It is hereby ORDERED on this 2nd day of October, 1997, that a title insurer, its title insurance agents and brokers may not charge or collect any MAHT compliance fees.
This Notice and Order No. MIA-186-10/97 is effective immediately and all title insurance insurers shall notify their agents accordingly.
Steven B. Larsen
By: Jean E. Beinemann
Property and Casualty Section
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.