ANNUAL REPORT: TO OUR CUSTOMERS
A new company is born but retains the same old name and logo. Our Company is that company, First American Title Insurance Company of New York ("FATICONY"). Imagine starting a new business today in New York State; what kind of organization would you strive to become and what goals would you set in today's highly regulated industry? Last year, we saw Company net admitted assets and gross ledger assets grow over 9% and 5%, respectively, to reach record levels. Why change?
FATICONY, along with a number of other Underwriters in our industry, spent the better part of two years under intense scrutiny by the New York State Attorney General ("AG") in conjunction with the New York State Department of Insurance ("DOI"), which concluded in a joint settlement late in May of 2006. In that Settlement of Discontinuance, the Company agreed to a $2 million settlement payment in conjunction with amending business practices mainly related to out-of-state business generation. In addition, a number of Underwriters, including FATICONY, effectuated a 15% rate reduction in the state of New York effective June 15, 2006 on all owner/fee policies up to $1 million value purchase price. Finally, the investigation forced the Industry to review and tighten up its compliance and governance practices.
Over the last two years, we heard a great deal about what we did wrong. The other side of the story, however, rarely gets told. The title industry plays the role of risk eliminator for lenders as well as owners. It is the second largest collector of taxes and fees for local municipalities, counties and state governments. I am sure that owners and lenders with title policies may not like what it costs for coverage, but when the title industry is at work, corruption, theft and fraud at title closings are reduced substantially. Imagine a business in which doing the groundwork reduces your losses. Furthermore, we strive to keep record repositories current and data easily understood. With that said, as each real estate transaction (closing/settlement) involves the transfer of money, assets and property, there is no better partner or friend to individuals, banks, financial institutions, law firms, brokers, corporations, partnerships and others, than a title insurance underwriter and its respective agents who do their jobs, keep information for real estate current and protect their insured from loss, the fear of loss and the large cost of litigation.
I suppose it is time to change. Yes, let us try to be less forgetful, careless and indifferent. Strive for better service, quicker responsiveness, greater utilization of technology and sending information more clearly and effectively. As stated above: each day we serviced households and lenders, underwrote risks and collected taxes and fees by the billions for governments. We did our jobs. I conclude that our colleagues and hundreds of agents and their colleagues should be proud of the year we had. I am grateful to all of them.
Lastly, I want to thank our customers. Without their trust in what we do, we would never be successful in achieving our goals.
Thanks again for another great year!
James M. Orphanides
Chairman, President & CEO