Proposed Designation Rule

Last year, the Department of Financial Services circulated a draft rule to address abuses and misleading practices by certain insurance agents using "self conferred" or essentially meaningless credentials in their advertisements. Judging by some newspaper articles, that has become all too common in other fields of insurance.

Last October, we submitted formal comments pointing out that fortunately, the use of unearned or misleading designations has not become a problem in title insurance.   And we agreed that no-one should use a designation which they have not earned, or to do so in a false or misleading manner, and that FLTA was supportive of  the goals of the rule -- but had concerns about some of its details.

The original Draft Rule and our First Submission to DFS on the Designation Rule are attached.

On June 21, 2011, the DFS circulated a Revised Draft of the rule, which addressed some but not all of our concerns. 

The second formal hearing on this proposed rule was held Tuesday, July 26, 2011, in Tallahassee.   FLTA was represented by our President, Pat Hancock; Agent Section Chair Beverly McReynolds; Executive Director Alan Fields; and representatives from a number of the underwriters.   We stressed the importance both of protecting the use of the CLC/CLS designations that our members have worked so hard to earn, and that the proposed restrictions were overly broad and more likely to restrict the "honest" title agent, while permitting the "Charlatans" to continue misuse designations.

Copies of our written submissions regarding the revised draft are available here and here.

On September 15, 2011, DFS released additional changes to the draft rule.   A redline showing those changes in the context of their prior version is here.   The changes did address the difficulties FLTA saw in proving that we had published the standards for the CLS designation almost 50 years ago, but added to our concerns by purporting to regulate job titles.   Here is the FLTA response.

On November 9, 2011, DFS announced that the final rule had been approved and would go into effect on November 16, 2011. 

While FLTA supports the public policy goals underlying this rule and believes that no-one should use a designation they haven't earned or make false statements about their credentials, we have serious concerns about the poor drafting and its facial application to even true statements and job descriptions.  As drafted, it could require a significant reworking of our members' advertising websites and practices.   

The FLTA Board is evaluating whether a formal rule challenge should be pursued and urge our members to offer their thoughts on a possible rule challenge on the Gov't Affairs Blog.

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