Clarification on Bulletin 2024-2

BULLETIN 2024-2(a) 4315 South 2700 West, Suite 2300, Taylorsville, Utah 84129 ● Office (801) 957-9200 ● Facsimile (385) 465-6047 ● insurance.utah.gov State of Utah SPENCER J. COX Governor DEIDRE M. HENDERSON Lieutenant Governor Insurance Department JONATHAN T. PIKE Insurance Commissioner To: Utah Title Insurance Licensees From: Jonathan T. Pike, Insurance Commissioner Date: March 12, 2024 Subject: Clarification of Bulletin 2024-2 Utah’s legislature has directed two state agencies, the Insurance Department and the Division of Real Estate (DRE), to regulate affiliated title insurance businesses. On one hand, the Department enforces against those businesses state laws that prohibit unfair inducements. See Utah Code § 31A-23a-402 and Utah Admin. Code R592-6. On the other hand, the DRE enforces against those businesses federal law, RESPA Section 8, that also prohibits unfair inducements. Under this dual regulatory scheme, the legislature has offered some guidance on the roles that the two agencies should play. First, only the DRE is authorized by the legislature to enforce RESPA Section 8. Id. at §§ 31A-23a-1001(8), -1002, -1003. Second, “for purposes of state law, Section 8 of RESPA governs an affiliated business arrangement.” Id. § 31A-23a-1002(1). Unfortunately, the legislature’s guidance does not provide full clarity about the proper roles of the Department and the DRE. This key question remains: To what extent do the Department and its unfair inducement laws apply to affiliated business that are also governed by the DRE and the unfair inducement laws under RESPA Section 8? The Department recently issued Bulletin 2024-2 in an attempt to provide further guidance on this issue. Some title industry members objected to the Bulletin because it seemed to say that the Department would no longer enforce certain regulations against affiliated title insurance businesses. To prevent further misunderstanding, the Department is clarifying its continued intent to enforce § 31A-23a-402 and R592-6 against affiliated title insurance businesses. The Department anticipates further work on this issue and will seek input from industry and the DRE. Please address questions about this Bulletin to Reed Stringham (rmstringham@utah.gov) or Tracy Klausmeier (tklausmeier@utah.gov). DATED this 12th day of March 2024. _________________________________ Jonathan T. Pike Insurance Commissioner