Rate Schedules

PURPOSE: This regulation prescribes procedures to be followed by title insurers when filing rate schedules with the director. (1) Definitions. As used in this regulation, the following terms shall mean: (A) Charge means any fee charged to the insured, or paid for the benefit of the insured, for the performance of title-related services other than the risk rate charged for title insurance. This charge shall include, but not be limited to, fees for abstracts, title search and examination and handling of escrows, settlements, or closings; and (B) Risk rate means the total consideration paid by or on behalf of the insured for a title insurance policy. Risk rate shall include the title insurance agent’s commission but shall not include any charge as defined in subsection (1)(A). (2) Filing of Rates. (A) Title Insurance Rates. Every title insurer licensed in Missouri shall file with the director as required by section 381.181, RSMo 1994, a completed title insurance rate reporting form for the risk rates it proposes to use in each county of this state and each city not within a county in this state. Rate schedules filed under this rule must comply with section 381.171, RSMo 1994. The effective date for these rates shall be no earlier than the thirtieth day following the receipt of the form by the director. (B) Filing Form. The Uniform Premium (Risk Rate) Report form (Form T-7) sets forth a risk rate reporting format to be utilized by title insurers in this state for the respective types of title insurance contracts. When computing insurance premiums on a fractional thousand of insurance (except as to minimum premiums), multiply those fractional thousands by the rate per thousand applicable, considering any fraction of one hundred dollars ($100) as a full one hundred dollars ($100). The form can be accessed at the department’s website at www.insurance.mo.gov or at the department offices. (C) Closing Protection Rates. Every title insurer shall file with the director rates for closing protection letters applicable to residential real estate transactions. Rates for closing protection letters in residential real estate transactions shall meet the following standards: 1. Rates shall not be excessive or inadequate; 2. Rates are excessive if, in the aggregate, they are likely to produce a long run profit that is unreasonably high in relation to the risk of the business or if expenses are unreasonably high in relation to the services rendered; 3. Rates are inadequate if they are clearly insufficient, together with investment income attributable to them, to sustain projected losses and expenses or if continued use of such rates will have the effect of substantially lessening competition or the effect of tending to create a monopoly; 4. Rate filing standards apply separately to closing protection letters issued under section 381.058.3(2)–(3), RSMo; 5. The rate filing shall document the anticipated losses, expenses, and profits underlying the rates and provide appropriate actuarial support for the data, methods, and assumptions; 6. Expected losses for rates do not include losses that result in a title insurance claim; and 7. Rates shall reflect expected fiduciary practices under current law and losses incurred in another state or under prior fiduciary practices may only be used if adjusted to reflect prospective Missouri fiduciary practices. AUTHORITY: section 374.045, RSMo 2000 and sections 381.042 and 381.058, RSMo Supp. 2007.* This rule was previously filed as 4 CSR 190-20.011. Original rule filed Jan. 14, 1982, effective June 1, 1982. Amended Filed Sept. 6, 1988, effective Jan. 16, 1989. Emergency rescission filed July 28, 1989, effective Aug. 7, 1989, expired Dec. 4, 1989. Emergency amendment filed Jan. 16, 2008, effective Jan. 28, 2008, expired July 14, 2008. Amended: Filed Jan. 16, 2008, effective Sept. 30, 2008. *Original authority: 374.045, RSMo 1967, amended 1993, 1995; 381.042, RSMo 2000, amended 2007; and 381.058, RSMo 2000, amended 2007.