3 Colo. Code Regs. § 702-8-1-1-5

Current through Register Vol. 48, No. 1, January 10, 2025

Section 3 CCR 702-8-1-1-5 - Rules Regarding Rate and Fee Filing Requirements

A. Each title insurance entity must submit a complying filing electronically, in a format prescribed by the Commissioner, with an effective date that is at least thirty (30) days after the date the Division receives the filing electronically.

1. A title insurance company's filing must include justification for any new or amended rate or fee being placed on file that a consumer may be charged.

2. A title insurance entity's filing must include justification for any new or amended fee being placed on file that a consumer may be charged.

3. Each rate or fee filing must include information outlined in Sections 5.C.3 and 5.D.3. Failure to provide the information in Sections 5.C.3 and 5.D.3 will render the filing incomplete. Incomplete filings are deficient. Deficient filings that are not rectified will be rejected on or before the 30^th day after receipt by the Division.

4. A rate or fee filing that does not include an effective date at least 30 days after the date the Division receives the filing will be considered deficient. The title insurance company can rectify the deficiency to include an effective date that is more than 30 days after the filing date. However, a failure to rectify this deficiency will result in the rejection of the rate or fee.

5. Any deficiency will be identified and communicated through the System for Electronic Rate and Form Filings (SERFF) database to the title insurance entity on or before the 15^th day after receipt. Filings that do not include the required information to rectify the identified deficiency will be rejected on or before the 30^th day after receipt by the Division.

B. Title insurance agencies or title insurance agents that use multiple title insurance companies as underwriters must place on file and justify their own fees and may not have the fees placed on file by the underwriter on their behalf.

C. General Rate Filing Requirements

1. Each title insurance company must submit all rate filings electronically in SERFF.

2. Each filing must be received by the Division at least thirty (30) days prior to the effective date of the new or amended rates.

3. Each filing must include justification for the new or amended rate being submitted. Justification must include data to support the rate. Justification includes, but is not limited to:

a. Expense provisions- data must clearly describe the amount of the fixed and/or variable expense provision and how this provision is to be accounted for in the final rate. This includes an itemization of actual or average expenses associated with each rate. Examples of some expenses include but are not limited to: amounts retained by or commissions paid to agents; claims; taxes; personnel; office space; office equipment; supplies; other overhead; and vendor services, etc.;

b. Expected losses and loss ratios; or a rationale as to why such losses or loss ratios are not applicable. If expected losses and loss ratios are not provided in the initial filing, such data must be provided consistent with Section 5.C.4. for amended rates or Section 5.C.5 for new rates;

c. Rate history listing the effective date and percentage amount of any rate changes made in the past three (3) years for the rate(s) being changed. If the last rate change was more than three (3) years ago, then the effective date, SERFF filing number, and percentage of change are required;

d. Methodologies and material assumptions in developing the rate; or a rationale as to why such methodologies or material assumptions are not applicable. If methodologies or material assumption data are not provided in the initial filing, such data must be provided consistent with Section 5.C.4. for amended rates or Section 5.C.5 for new rates;

e. The amount and description of all profit and contingencies built into the rate; or a rationale as to why such profit and contingencies are not applicable. If profit and contingencies data are not provided in the initial filing, such data must be provided consistent with Section 5.C.4. for amended rates or Section 5.C.5 for new rates;

f. A description of the rate and any and all services must be provided in the rate manual. For example, when submitting a "bundled rate", include a line item for each service included in the bundle;

g. If a comparative analysis is used as a portion of the rate justification, the insurer must include in the analysis the names of other insurers used in the analysis, and must demonstrate how the rates being compared are comparable in services and expenses; and

h. Any other determining factor used to develop the final rate.

i. If any of the above referenced justification information (a-h) is not provided, then the Rate Cover Letter found in Appendix H will be required at the time of filing.

4. Each amended rate filing shall contain a side-by-side comparison of the rating manual indicating the changes made in the current filing, the rate(s) prior to the change, and the new or amended rate(s). The comparison should include three columns: the first containing the current rates; the second containing the proposed rate; and the third containing percentage increase or decrease of each proposed change. If the proposed rates are not replacing existing rates, then the filing must specifically state that the rates proposed are new rates. The format in which the new rates shall be filed with the Division can be found in Appendix C of this regulation. The format in which the amended or withdrawn rates shall be filed with the Division can be found in Appendix D of this regulation.

5. The introduction of a new rate shall contain credible company experience to support the reasonableness of the rate. Any new rate that does not include specific Colorado data will require the title insurance company to submit a new filing no later than one year to include Colorado historical information in the justification for the new rate. If proper Colorado historical information is not available, a filing must be made annually from the effective date of the rate to include any new Colorado historical information justifying the new rate until credible experience has been established.

6. If one or more of the justification items are not provided in the proposed filing, the title insurance company must explain and support with specificity the rationale for not including the listed piece(s) of information in the filing. The Division will determine whether the proposed rationale for omission is valid. If the Division concludes that the omission is invalid, the title insurance entity will submit the required justification within fifteen (15) calendar days from the date of the objection letter.

7. The "Title Insurance Rate Justification Form", which is found in Appendix G. of this regulation, is required to be filed with the Division and includes insurance rates a consumer may be charged during a real estate transaction.

8. A redline copy and final copy of the rating manual with the proposed new or amended rates.

D. General Fee Filling Requirements

1. Each title insurance entity must submit all fee filings electronically in SERFF if the title insurance entity charges fees.

2. Each filing must be received by the Division at least thirty (30) days prior to the effective date of the new or amended fee.

3. Each filing must include justification for the new or amended fee being submitted. Justification must include data to support the fee. Justification includes, but is not limited to:

a. An itemization of any expenses associated to the new or amended fee. Expenses may include, but are not limited to: the actual or average expense of the fee, personnel, operations, leases/rent, equipment, business insurance, vendor services, office supplies, miscellaneous costs, and any pass-through expense;

b. The amount and description of all profit and contingencies built into the fee. If profit and contingency is zero for a particular fee, zero must be included in the filing;

c. The "Title Insurance Closing and Settlement Fee Filing Agency Fee Sheet for Consumers" which is found in Appendix B of this regulation, is required to be filed with the Division and includes a general description of what is included in the services provided for the new or amended fee. For example, when submitting a "bundled fee", include all of the services and fees that are included in the bundle;

d. If a comparative analysis is used as a portion of the fee justification, the analysis must include the names of other title insurance entity(ies) used in the analysis and must demonstrate how the fees being compared are comparable in services and expenses;

e. Fee history listing the effective date and percentage amount of any fee changes made in the past three (3) years for the fees being changed. If the last fee change was more than three (3) years ago, then the effective date, SERFF number or filing number, and percentage of change are required; and

f. Any other determining factor used to develop the final fee.

g. If any of the above referenced justification information (a-f) is not provided, then the Fee Cover Letter found in Appendix I will be required at the time of the filing.

4. Each amended fee filing shall contain a side-by-side comparison of the fee schedule indicating the changes made in the current filing, the fee(s) prior to the change, and the new or amended fee(s). The comparison should include three columns: the first containing the current fee; the second containing the proposed fee; and the third containing percentage increase or decrease of each proposed change. If the proposed fees are not replacing existing fees, then the filing must specifically state that the fees proposed are new fees. The format in which the new fees shall be filed with the Division can be found in Appendix E of this regulation. The format in which the amended or withdrawn fees shall be filed with the Division can be found in Appendix F of this regulation.

5. The introduction of a new fee shall contain credible experience to support the reasonableness of the fee. Any new fee that does not include specific Colorado data will require the title insurance entity to submit a new filing no later than one year to include Colorado historical information in the justification for the new fee. If proper Colorado historical information is not available, a filing must be made annually from the effective date to include any new Colorado historical information justifying the new fee until credible experience has been established.

6. If one or more of the justification items are not provided in the proposed filing, the title insurance entity must explain and support with specificity the rationale for not including the listed piece(s) of information in the filing. The Division will determine whether the proposed rationale for omission is valid. If the Division concludes that the omission is invalid, the title insurance entity will submit the required justification within fifteen (15) calendar days from the date of the objection letter.

7. The "Title Insurance Closing and Settlement Fee Justification Form" which is found in Appendix A of this regulation, is required to be filed with the Division, and includes commonly used fees a consumer may be charged during a real estate transaction. Each title insurance agent and title insurance company, if the title insurance company charges fees, must place on file his or her fees and any justification used by the title insurance agent.

8. A final copy of the fee sheet with the proposed new or amended fee.

3 CCR 702-8-1-1-5

38 CR 17, September 10, 2015, effective 10/1/2015

39 CR 14, July 25, 2016, effective 8/15/2016

40 CR 03, February 10, 2017, effective 3/15/2017

41 CR 12, June 25, 2018, effective 7/15/2018

42 CR 14, July 25, 2019, effective 8/15/2019

43 CR 14, July 25, 2020, effective 8/15/2020

45 CR 16, August 25, 2022, effective 9/14/2022