A key state lawmaker proposed legislation yesterday to bring tighter controls to Maryland's title insurance business, including measures aimed at preventing those who have mishandled clients' money from engaging in the business.
"It's hard to legislate against corruption, but we've put a lot of work into this to address the situations that have led to problems," said Del. Michael E. Busch, chairman of the House Economic Matters Committee and sponsor of the bill.
Glen Jackson, head of the Maryland Land Title Association and president of Sentinel Title, said he generally was encouraged by Mr. Busch's proposal.
"It's a really good attempt to give the insurance commissioner teeth to regulate the industry," Mr. Jackson said. "The bill has some work to be done on it, but it's moving in the right direction."
The move toward reforms for the title insurance industry, which sells policies to protect property transactions from fraud and liens, came after a Dec. 21 article in The Sun. The article showed that Maryland title insurance agents who have admitted or been convicted of stealing clients' money from escrow accounts have returned with ease to the industry.
Mr. Busch's bill, which has been scheduled for a hearing March 6, would:
* Require title insurance license applicants to submit the names of the company's owners and the names and addresses of each of its agents and brokers.
* Require the state insurance commissioner to investigate the background of each partner in a company controlled by a partnership and the backgrounds of the majority owner and directors of a corporation.
* Require majority owners, officers and directors of title insurance companies to obtain a state license to sell title insurance.
Mr. Busch's bill is the second proposed this year that would strip lawyers of their licensing exemption. Sen. F. Vernon Boozer of Baltimore County also has submitted a bill calling for that measure.
The $100,000 surety and fidelity bonds required by law to be posted by title companies would not increase under Mr. Busch's bill.