Bulletin: FL000087

Dear Associates:

The Butler case has been decided by the Florida Supreme Court in favor of Clark Butler and against the industry (Chicago Title Insurance v. S. Clark Butler, October 19, 2000). The case was filed by Clark Butler seeking to set aside several sections of the Florida Statutes and a section of the Administrative Code dealing with rebates. The original case was filed against the Department of Insurance, but the Department did not file an appeal. The case was defended by several of the larger underwriters, including Stewart. The holding of the Court is that a customer may now negotiate with a title insurance agent a rebate to the customer, or a reduction in the premium to be paid by the customer, for some portion of the 70 percent of the promulgated rate that is otherwise deemed to be the agent's portion. The underwriter's portion is not affected.

The Court stated: "Florida Statutes and... The Florida Administrative Code, to the extent they prohibit title insurance agents from rebating a portion of their risk premium, are unconstitutional..."

This decision has to be read in conjunction with R.E.S.P.A. A rebate to a business provider or anyone in a position to provide customers, such as a Realtor, a Mortgage Broker, a Lender, would still be a violation of R.E.S.P.A. On the other hand, nothing in this ruling prohibits a third party such as a Realtor, Mortgage Broker or a Lender from negotiating on behalf of its customer who is also your customer to bring them the lowest fee that they can arrange.