RICHMOND — The State Corporation Commission (SCC) has
been named receiver of Southern Title Insurance Corporation by the Circuit Court
of the City of Richmond. Southern Title and the Commission determined that the receivership
was necessary to protect the interests of policyholders and creditors.
Southern Title, a regional title underwriter, is a Virginia-domiciled insurer writing
title insurance coverage. Southern Title is headquartered in Richmond, Virginia
and licensed to do business in 21 states.
A title insurance company issues policies in conjunction with the sale of property.
The company conducts a thorough search of property records for documents affecting
the property in question, particularly defects of title. If a defect is found, then
remedial action is necessary before a policy is issued. Title insurance coverage
protects the policyholder if, at some time in the future, a defect is claimed and
Southern Title voluntarily suspended the issuance of new title policies on September
15, 2011. The SCC issued an order of suspension on September 19. An impairment order
was issued by the SCC on November 4 because the company no longer met minimum capital
and reserve requirements. Southern Title experienced financial difficulties because
of agent defalcations in Texas and the rise in title insurance claims arising from
that alleged misuse of funds.
Virginia Commissioner of Insurance Jacqueline K. Cunningham has been appointed deputy
receiver in an effort to rehabilitate the company. A moratorium has been placed
on the payment of claims until the deputy receiver completes an evaluation of Southern
Title’s financial condition.
Policyholders with questions about the receivership are encouraged to call the SCC’s
Bureau of Insurance. From within Virginia, the toll-free number is (800) 552-7945.
Callers may also dial directly at (804) 371-1502.
SCC case number INS-2011-00239
Circuit Court file CL11-5660-RDT