ALTA FEDERAL CONFERENCE

1. ALTA FEDERAL CONFERENCE March 7-8, 2006 Washington, D.C.

2. OVERVIEW • Identify current climate, key issues and opportunities • Provide a set of messages members can use • Ensure that we are all forwarding positive, consistent messages

3. CURRENT CLIMATE • Reinsurance issue in 2005 • Birnbaum report in California • Colorado DOI investigation into ABAs • Agent defalcations (CO, NY) • U.S. Rep. Michael Oxley’s letter to the GAO

4. KEY ISSUES & MISPERCEPTIONS • Title insurance costs too much • Claims are low compared to other lines of insurance, so you are overcharging • There is a lack of competition in the title industry, keeping costs high • Technology should lower prices • Monoline restrictions keep competitors out of the market • Iowa has a better title insurance system • The title industry has engaged in bad conduct

5. KEY ISSUES & MISPERCEPTIONS • There may also be questions raised about: • The GAO “Study” • RESPA Reform • Federal Regulation of Insurance

6. OPPORTUNITIES • Educate our audiences about title insurance. • Clear up the misinformation and confusion. • Communicate the value and benefits of this important protection.

7. TOP 10 MISPERCEPTIONS & QUESTIONS

8. #1 COST • Some have criticized the cost for title insurance. Are premiums in line with the value of the product? • A one-time premium covers the life of a loan and/or property ownership. For the price, it’s a bargain. • Rates are heavily regulated. • Rates must ensure reserves and solvency of insurers.

9. #2 CLAIMS • Why do title insurers only pay 5% of premiums in claims when property and casualty companies pay 70%? Aren’t you gouging consumers to increase your profits? • Title insurance is based on loss prevention rather than loss assumption. The majority of our costs are on the front end. • Our expenses total 90% of the premium dollar compared to P&C companies at approximately 25%.

10. #3 COMPETITION • When closing services are largely selected by disinterested third parties (i.e. real estate and mortgage professionals), doesn’t that foster a non-competitive atmosphere, at least in terms of price? • In truth, consumers choose not to get involved in the process. • Title companies compete fiercely for business with “third-parties”. • Consumers should be helped to understand why they need this important protection. • ALTA’s Web site has information to help consumers make informed decisions.

11. #4 TECHNOLOGY • Haven’t advances in technology made it easier to do a title search, and shouldn’t prices reflect that? • Title searches are not like a “Google” search. • Only 10-15% of counties have automated title files. • Most rely on manual searches of paper-based archives. • Counties don’t have the budget to automate title data. • Private “title plants” are expanding, but represent a considerable cost.

12. #5 MONOLINE • What are monoline restrictions, and are they still applicable today? Don’t they prevent competitors from entering the market, which would lower prices? • Monoline restricts companies writing certain high-risk lines of insurance to writing only those lines. • Monoline ensures the reserves and solvency of insurers for the protection of policyholders. • Non-title insurers lack appropriate reserves and underwriting experience for title insurance.

13. #6 IOWA SYSTEM • Iowa’s system of title insurance is run by the state. Why haven’t other states followed Iowa’s example? • Most Iowa mortgages are insured out of state. • Only half of title losses are covered by Iowa system. • As a government-run monopoly, there is no competitive incentive to keep pace with markets and consumer needs.

14. #7 INDUSTRY CONDUCT • We keep hearing about agent defalcations, kickbacks, and regulatory actions being taken against title companies. Is this an industry-wide problem? • Every industry has its share of “bad apples” and fraudulent activity. • Fraudulent practices should be prosecuted to the full extent of the law. • ALTA supports practices that are compliant with the laws and regulations governing the title industry.

15. #8 GAO • Why is the GAO looking into the title industry? • The complexity of our business has created misinformation and misunderstanding about title insurance. • ALTA met with and is assisting the GAO fully. • We view this as an opportunity to clear up the confusion that exists in the marketplace.

16. #9 RESPA REFORM • Does the title industry support RESPA reform, and how will that impact your business? • ALTA supports HUD’s efforts to make the home buying process more transparent for consumers. • ALTA actively participated in all HUD-sponsored workshops last year. • It is unknown when HUD might publish a proposed rule, or what that rule might include.

17. #10 FEDERAL REGULATION OF INSURANCE • What about regulating title insurance at the federal level. Will that work? • No. • Title insurance is very tied to local customs and laws. • It represents an enormous undertaking to establish federal regulations that reflect variations in all 50 states. • State regulators can respond to the local marketplace more quickly.

18. OPPORTUNITIES AND TOOLS

19. UPCOMING OPPORTUNITIES • National Homeownership Month – June 2006 • Proclamation by President Bush • Supported by HUD Workshops throughout the country

20. HOMEOWNERSHIP MONTH • PresidentialProclamation: “From the earliest days of our Nation, homeownership has embodied the core American values of individual freedom, personal responsibility and self-reliance. Homeownership is also a bedrock of the American economy, helping to increase jobs, boost demand for goods and services, and build prosperity.”

21. HOMEOWNERSHIP MONTH • The Title Industry: For 125 years, the title industry has protected the American dream of homeownership. The land records and title insurance system in the U.S. allows people to secure loans on real estate to build, be entrepreneurial, create jobs, and grow our economy.

22. HOMEOWNERSHIP MONTH • Opportunities for Local Involvement: • Find out what’s happening in your community. • Initiate a proclamation by your local government. • Sponsor a booth at a local fair. • Give a presentation to a local civic group. • Place an ad and/or article in your local newspaper. • Participate in a ‘Habitat for Humanity’ project.

23. TITLE INDUSTRYMARKETING KIT Promote your business while forwarding our value proposition New addition: Member Article Library (look for article on NHM in May)

24. QUESTIONS AND ANSWERS