HOUSE BILL REPORT

                  HB 2569

             As Reported By House Committee On:

             Financial Institutions & Insurance

Title:  An act relating to title insurance policies.

Brief Description:  Disclosing information about owner's title insurance policies.

Sponsors:  Representatives Dyer, Zellinsky, Brumsickle and B. Thomas.

Brief History:

Reported by House Committee on:

Financial Institutions & Insurance, January 27, 1994, DP.

HOUSE COMMITTEE ON FINANCIAL INSTITUTIONS & INSURANCE

Majority Report:  Do pass.  Signed by 13 members:  Representatives Zellinsky, Chair; Scott, Vice Chair; Mielke, Ranking Minority Member; Dyer, Assistant Ranking Minority Member; Dellwo; Dorn; Grant; Kessler; Kremen; R. Meyers; Schmidt; Tate; and L. Thomas.

Minority Report:  Do not pass.  Signed by 2 members:  Representatives Anderson and R. Johnson.

Staff:  Charlie Gavigan (786-7340).

Background:  Title insurers are regulated by the Insurance Commissioner.  Generally, when a lender enters into a mortgage on residential real property, the lender requires the borrower to purchase title insurance to protect the lender's interest (the loan) against loss from a defective title.

Summary of Bill:  Every lender that accepts an application for a loan secured by real property must disclose in writing, in conjunction with other required disclosures, that an owner's title insurance policy is available to protect the owner from loss from a defective title.  The lender must assist the borrower in obtaining information requested by the borrower regarding an owner's title insurance policy.

Fiscal Note:  Not requested.

Effective Date:  The bill takes effect July 1, 1994.

Testimony For:  This bill is necessary to provide better disclosure to borrowers that an owner's title policy is available to protect the owner's interest in the title for only a small additional charge.  Current disclosures are not adequate.

Testimony Against:  This information already is disclosed to the borrower.  This bill would only increase lender's paperwork.

Witnesses:  Representative Phil Dyer, prime sponsor (supports); Scott Gaspard, Washington Savings League (opposes); and Larry C. Shannon, Washington Mortgage Lenders Association (opposes).