Subcommittee delays vote on title‑premium disclosure bill after contested testimony

The Business & Utilities Subcommittee paused consideration of House Bill 0569 after extended, contested testimony about so‑called premium‑sharing practices in residential closings.

Chairman Farmer introduced a late amendment (drafting code 015483) that would require title‑agencies to disclose premium sharing and obtain underwriter consent before splitting title fees. Ryan Rayfoth, an attorney representing a coalition of more than 40 title‑agency owners, testified that “premium sharing is simply compensation for services rendered, not unapproved sharing of liability,” and warned the amendment would increase closing costs and disadvantage smaller, local agencies. Rayfoth urged the committee to vote no.

Carlton Drumwright, a licensed attorney and title‑agency owner, countered that the amendment protects consumers and clarifies that the title insurer — not the agent — bears the risk for underwriting: “When a seller and a buyer agree who the buyer is going to be closing with and sign that contract, the title agency that the buyer is closing with is exclusively authorized to issue the title policy for the benefit of that buyer,” Drumwright said. He also described losses his firm experienced when counterpart agencies failed to fulfill obligations under split arrangements.

Members asked detailed questions about whether liability was shared historically and whether disclosure alone could address the committee’s concern. Witnesses said the Tennessee Department of Insurance had weighed in and that market customs vary by region; some witnesses said they had already ceased liability‑sharing practices. Because members requested more time to vet the late amendment and stakeholders asked for additional review, the committee agreed to pick up the bill next week rather than vote today.

Next steps: HB0569 will return to the subcommittee for further consideration with the late amendment available for review.