Maryland Officials Seize Title Insurance Company
(BALTIMORE) February 14, 2000 -- Today, Maryland Insurance Commissioner Steven B. Larsen obtained a court order allowing him to take receivership of Bankers Title Insurance Company. The court order follows an emergency order issued by the Insurance Administration on Friday, February 11, suspending the company’s license and business operations and suspending two agents’ licenses. This action was taken after a preliminary investigation indicates that more than $1 million in escrow funds and insurance premiums owed to homebuyers, sellers, insurers and others is missing. "We believed it was crucial to take immediate action and launch an investigation to protect Maryland citizens," said Commissioner Larsen. "The receivership will enable the Insurance Administration to supervise and control further actions of Bankers Title." An insurer with whom Bankers Title does business alerted the Insurance Administration about the apparent shortage, prompting Commissioner Larsen to take immediate action. When homebuyers go to settlement, the settlement officer often is also the title insurance agent and is responsible for maintaining the escrow accounts and properly disbursing funds. Typically, the settlement officer issues a check to the seller of the property, pays off prior mortgages, and pays taxes and other costs associated with settlement. The Insurance Administration’s initial investigation discovered significant shortages in the escrow accounts, and, therefore funds may not be available to pay the amount due. This could interfere with pending settlements. Suspending Bankers Title’s and the involved agents’ licenses prevents the company and agents from soliciting, procuring or negotiating any insurance contracts; providing any escrow, closing or settlement services; soliciting or issuing funds to the public; and, taking any other action for which an insurance license is required. The Insurance Administration is working with the title insurance companies Bankers Title represented to determine the number of real estate closings affected. The preliminary investigation indicates closings that occurred within the last few months are the only ones likely to be affected. Complaints relating to a closing conducted by Bankers Title should be directed to Sandee Castagna, Consumer Complaint Investigation, at 1-800-492-6116 x2340, 410-468-2340, or miaweb@mia.state.md.us. |
