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Contested title-premium bill paused after testimony from small agencies and attorneys
Summary
The committee took testimony on HB569, which would require disclosure and insurer acknowledgment when title agencies split premiums in residential closings. Competing witnesses—attorneys representing smaller local agencies and representatives of national/chain interests—debated whether split premiums are legitimate compensation or risk consumer harm; the committee carried the item for further review.
House Bill 569 drew extended testimony and was carried over for further consideration after a spirited exchange between title-agency owners and lawyers.
Representative Farmer described the billand a late-file amendment as requiring disclosure when title agencies split premiums and asking underwriters to acknowledge and consent to those arrangements. "This will require that they're required to disclose that in writing," the sponsor said, explaining the proposal applies to residential closings.
Ryan Rayoth, representing a coalition of more than 40 attorneys and title-agency owners in Middle Tennessee, urged the committee to reject the bill. "So-called premium sharing is simply compensation for services rendered, not unapproved sharing of liability," he told lawmakers, arguing split premiums pay for work such as title examination and document preparation and that insurers control underwriting and can stop unsafe practices.
Opposing Rayoth's view, Carlton Drumright, an experienced Tennessee attorney and owner of a local title company, told the committee that split-premium arrangements "provide multiple risks to both the industry and the consumer including unauthorized co-insuring and guaranteeing of titles by non-licensed entities, absence of financial vetting for those guarantees and no regulatory enforcement mechanism for the purported guarantee." Drumright and witness Laura Mitchell said their firms faced losses and coercive tactics tied to premium-split arrangements and that the bill would protect consumers and buyers' choice of settlement agent.
Members agreed to pause further action to allow time to review the late-file amendment and to gather additional stakeholder input; the chair said the committee will resume the item next week. No vote on HB569 was taken during the hearing.
The debate centered on two competing claims: one side that premium splits are lawful compensation for professional services and have operated as standard local practice for decades; the other that splits mask unvetted guarantees and may increase consumer risk and closing costs if left unregulated. Several members urged additional negotiation rather than an immediate binary ruling.
