Over the last 20 years, Texas has become the economic engine of the United States. Time and time again we lead the nation in economic and job growth, we weathered the Great Recession better than other states, and continue to attract new businesses from around the country. This hasn’t happened by accident; the Texas model of low taxes and spending, less regulation, a sound civil justice system, and less dependence on the federal government has made Texas what it is today.
Fighting against this trend has been effort to promote corporate welfare like we see in the title insurance business, where one business interest is pitted against others. In the case of title insurance, the state’s statutory directive to the Texas Department of Insurance to “completely regulate the business of title insurance” has created a system that adds significant costs for businesses engaging in real estate transactions. The system basically forces businesses to accept one product at one price, regardless of what the business actually needs. A perfect example of how this type of regulation harms businesses and the economy was price regulation in the trucking industry until the 1970s. But Senator Ted Kennedy and President Jimmy Carter saw the harmed caused by this and led the fight to bring competition into the trucking market.
It is time to do the same thing for the Texas title insurance market. A system that is focused on providing adequate and reasonable rates of return for one industry, that doesn’t allow discounts or rebates, and highly restricts who can provide title insurance isn’t what has made Texas the great state it is today and doesn’t benefit Texas businesses. The Foundation is actively researching how the benefits of competition and consumer choice can be introduced in order to bring the title insurance market fully into Texas’s nation leading 21st century economy.