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title insurance producer or agency for cause, either as the result of the findings of an onsitereview or some other determination and action by the underwriter. 10Underwriterssometimes also receive complaints from consumers, producers or other parties involvedwith a real estate settlement and refer such complaints to the MIA.The investigation of an alleged defalcation often involves multiple parties, as thetitle insurance producer or agency may have a history of escrow theft or misappropriationof funds for a number of real estate settlements. For example, in one case investigated bythe MIA, the underwriter notified the MIA that its on-site review of a title agencyrevealed escrow account discrepancies and that title insurance premiums due had notbeen forwarded from the agency to the underwriter. Independently, the MIA received acomplaint from a consumer regarding the same title insurance agency, alleging thatapproximately $7,000 was not disbursed by the agency to a creditor. A second consumercomplaint was received about the same title insurance agency, alleging a failure todisburse approximately $16,000 to the consumer’s creditors. The MIA investigated thesecomplaints and the affected parties obtained judgments in court that included recovery oftheir losses. 11Table 2 below details final administrative actions taken by the MIA as a result ofnotices received from January 1, 2008 through December 31, 2011 from underwritersindicating that a producer had been terminated for cause based on the results of an on-sitereview and where the MIA’s investigation revealed the theft of escrow funds.10 See § 10-118(e).11 In addition, the MIA revoked the title insurance producer’s and agency’s licenses.8
Table 2MIA OrderNumber 12Date ReportReceivedDate OrderIssued 13Amount ofMisappropriation20081 MIA-2008-05-040 –0432 MIA-2008--033 –0345/27/08 5/29/08 $3,000,0003/19/08 7/21/08 $1,300,000Total $4,300,0002009 N/A N/A $020103 MIA-2010-03-008 7/31/09 3/2/10 $630,6114 MIA-2010-07-014 – 1/21/10 7/12/10 $1,478,7610165 MIA-2010-07-017 – 9/20/08 7/12/10 $34,0970196 MIA-2010-07-020 – 6/27/08 7/12/10 $22,287021Total $ 2,165,75620117 MIA-2011-01-028 – 12/20/10 1/28/11 $1,028,5000558 MIA-2011-05-033 – 7/13/10 5/23/11 $51,7140349 MIA-2011-05-038 – 10/6/09 5/25/11 $254,16903910 MIA-2011-06-012 – 5/24/11 6/9/11 $2,400,00001511 MIA-2011-06-016 – 1/13/11 6/10/11 $652,00001912 MIA-2011-07-044 – 9/29/10 7/26/11 $312,00004513 MIA-2011-10-017 7/15/09 10/19/11 $1,763,000Total $6,461,3834-YEAR $12,927,13912 MIA Orders are available online at:http://www.mdinsurance.state.md.us/sa/jsp/availPubInfo/Orders.jsp?divisionName=Orders&pageName=/sa/jsp/availPubInfo/Orders.jsp.13 In some cases, the time between the date that a report is received and the date that an order is issued maybe affected by a concurrent state or federal criminal investigation.9
Page 2 and 3: Report of the Study ofClosing or Se
Page 4 and 5: TABLE OF CONTENTSI. EXECUTIVE SUMMA
Page 6 and 7: Although in a minority of states an
Page 8 and 9: or misuse of closing or settlement
Page 10 and 11: (4) Division of Consumer Protection
Page 14 and 15: As part of its Insurer Survey, the
Page 16 and 17: or dishonest practices, the underwr
Page 18 and 19: eported having a least one escrow a
Page 20 and 21: ond also may be purchased by an und
Page 22 and 23: 4. Other Protection Available to Un
Page 24 and 25: 1. Preventive MeasuresProducer Lice
Page 26 and 27: lender’s funds or documents. The
Page 28 and 29: In the event of the insolvency of a
Page 30 and 31: insurance task force. The informati
Page 32 and 33: in excess of 20 cents in claims on
Page 34 and 35: create an environment vulnerable to
Page 36 and 37: Appendix 1MARTIN O'MALLEY, Governor
Page 44 and 45: AppendixAppendix22MARTIN O’MALLEY
Page 46 and 47: Appendix 2c. If you answered “No
Page 48 and 49: Appendix 2Certification of Informat
Page 50 and 51: Appendix 2QUESTION #3Schedule BStat
Page 52 and 53: Appendix 3
Page 54 and 55: Appendix 3SURVEYTitle Insurance - C
Page 56 and 57: Appendix 3a. Does your title insura
Page 58 and 59: Appendix 3QUESTION # 2Schedule ADor
Page 60: Appendix 3QUESTION # 10Schedule CMi

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