It has come to the attention of this office that a charge called a "cancellation fee" is being made in some instances. Further, that this item has been reported by some agents and underwriters as "Bad Debts" in the Call for Texas Title Insurance Experience.
We are of the opinion that this is a direct loss to the abstract operation and should be billed as such. Further, such an item of expense should not be included in the Title Insurance Expense Exhibit.
There are no provisions in Chapter 9 of the Texas Insurance Code, or in the Rules and Rates Promulgated by this Board for cancellation or a cancellation fee, therefore such a charge is prohibited.
/s/ Ira M. Goodrich
Ira M. Goodrich
Director of Title Insurance