The Ohio Association of Independent Title Agents (OAITA) has filed a new lawsuit against the Ohio Department of Insurance (ODI) seeking a declaratory judgment from the Franklin County, Ohio Court of Common Pleas declaring that the Director of ODI’s construction and interpretation of OAC 3901-7-04 relative to the business of title insurance is: (a) in conflict with existing statutory law; (b) in conflict with legislative intent; and (c) an otherwise unconstitutional exercises of power not specifically granted to her under the Ohio Constitution.

OAITA is joined in the recently filed suit by Eagle Land Title Agency, Inc., a Columbus-area independent title insurance agency.

The lawsuit alleges:

(1) that the ODI Director has, through the construction of certain administrative rules such as OAC 3901-7-04, permitted and continues to permit certain unfair trade practices in the business of insurance in violation of Ohio Rev. Code Sec. 3901.21(E) by licensing title insurance agencies whose stock ownership was issued or delivered to third parties promising returns and profits as an inducement to insurance;

(2) that the ODI's construction of OAC 3901-7-04 permits the payment of title insurance commissions to statutorily prohibited persons in violation of Ohio Rev. Code 3953.25;

(3) that the ODI's construction of OAC 3901-7-04 allows prohibited persons to own an interest in a title insurance agency while not "controlling" said entity permits the provision of indirect payments in violation of Ohio Rev. Code Sec. 3953.26;

(4) that the ODI's construction of OAC 3901-7-04 impermissibly allows those persons and subsidiaries thereof to engage in the "business of title insurance" by owning an interest in, when not "controlling" a title insurance agency;

(5) that OAC 3901-7-04(H) conflicts with Ohio Rev. Code Sec. 3953.21(B);

(6) that the ODI Director has failed to apply OAC 3901-7-04 against existing agencies;

(7) that the ODI Director has licensed and continues to license entities that conflict with Ohio's Monopoly Act (Ohio Rev. Code Sec. 1331.01(B)(5) and 1331.02).

The lawsuit also seeks a permanent injunction against the continued application and/or enforcement of OAC 3901-7-04.

A copy of the complaint is available on the blog.