FOR PUBLICATION

ATTORNEYS FOR APPELLANT: ATTORNEYS FOR APPELLEE:

TODD L. PADNOS WADE D. FULFORD

DANIELLE T. KENNEDY Indiana Department of Insurance

Sheppard Mullin Richter & Hampton, LLP Indianapolis, Indiana

San Francisco, California

GREGORY F. HAHN

JAN M. CARROLL BRYAN H. BABB

SEAN P. BURKE KEVIN M. QUINN

Barnes & Thornburg LLP JOEL T. NAGLE

Indianapolis, Indiana Bose McKinney & Evans LLP

Indianapolis, Indiana

ATTORNEY FOR AMICUS CURIAE

INDIANA LAND TITLE ASSOCIATION, INC: ATTORNEYS FOR AMICUS CURIAE

NATIONAL ASSOCIATION OF

THOMAS E. WHEELER, II INSURANCE COMMISSIONERS:

Frost Brown Todd LLC

Indianapolis, Indiana KARL L. MULVANEY

MARGARET M. CHRISTENSEN

ATTORNEYS FOR AMICUS CURIAE Bingham Greenebaum Doll LLP

THE INDIANA LEGAL FOUNDATION: Indianapolis, Indiana

STEVEN M. BADGER ATTORNEY FOR AMICUS CURIAE

LEAH N. WILSON UNITED POLICYHOLDERS:

Benesch Friedlander Coplan & Aronoff LLP

Indianapolis, Indiana STEPHEN J. PETERS

Harrison & Moberly, LLP

Indianapolis, Indiana

IN THE

COURT OF APPEALS OF INDIANA

COMMONWEALTH LAND TITLE )

INSURANCE COMPANY, )

)

Appellant-Petitioner, )

)
2

vs. ) No. 49A04-1302-PL-84

)

STEPHEN W. ROBERTSON, INSURANCE )

COMMISSIONER OF THE STATE OF )

INDIANA, in his official capacity only and not )

in his individual capacity, on behalf of the )

INDIANA DEPARTMENT OF INSURANCE, )

)

Appellee-Respondent. )

APPEAL FROM THE MARION SUPERIOR COURT

The Honorable Michael D. Keele, Judge

Cause No. 49D07-1112-PL-48514

March 4, 2014

OPINION - FOR PUBLICATION

CRONE, Judge

Case Summary

The Indiana Department of Insurance (“IDOI”) conducted a targeted market 

examination of Commonwealth Land Title Insurance Company (“Commonwealth”) to 

determine if it was in compliance with the Indiana Insurance Code. Following the 

examination, the IDOI issued an order (“the Administrative Order”), concluding that 

Commonwealth violated Indiana Code Sections 27-4-1-4(a)(7)(C)(i) (“the Rate Statute”), 27-

1-3-4 (“the Unsafe Business Practices Statute”), and 27-1-18-2 (“the Gross Premium Tax 

Statute”), and ordered Commonwealth to take certain actions to cure its violations pursuant 
3

to Indiana Code Section 27-1-3.1-11 (“the Cure Statute”). Commonwealth petitioned for 

judicial review, and the trial court upheld the Administrative Order with one exception.

Commonwealth appeals the trial court’s order, arguing that the IDOI’s determinations 

that it violated the aforementioned statutes are unsupported by substantial evidence and that 

the cures the IDOI ordered are not authorized by the Cure Statute. We conclude that 

Commonwealth fails to carry its burden to show that the IDOI’s determinations are 

unsupported by substantial evidence and that the cures are not authorized by the Cure Statute. 

Accordingly, we affirm the trial court’s order.

Facts and Procedural History

Commonwealth is licensed to write title insurance in Indiana and has an 

administrative office in Jacksonville, Florida. During all times relevant to this appeal, 

Commonwealth marketed title insurance in Indiana solely through independent non-affiliated 

agents that sold Commonwealth’s title insurance pursuant to written agency agreements. 

 On September 11, 2009, the IDOI issued an examination warrant to Commonwealth,

informing it that it would be the subject of a Targeted Market Conduct Examination (“the 

Examination”) covering its title insurance transactions occurring in Indiana from January 1, 

2005, to January 1, 2010. The stated purpose of the Examination was to determine whether

Commonwealth (1) “permitted excessive charges and/or unfair discrimination in the amount 

of premiums charged to Indiana policyholders by their agents,” (2) complied with the Real 

Estate Settlement Procedures Act (“RESPA”) involving consumer disclosure requirements on 

HUD-1 Settlement Statements (“HUD-1 Statement”), and (3) “accurately reported the 
4

premium tax due on title insurance charges to Indiana policyholders for title insurance.”

Appellant’s App. at 331. 

By way of background, the HUD-1 Statement is a disclosure form completed by the 

agent pursuant to the issuance of a real estate mortgage on which all charges imposed upon 

the borrower and seller by the lender are itemized.

1 RESPA requires that the title insurance 

premium be disclosed on a HUD-1 Statement at mortgage closing. At all times relevant to 

this appeal, title insurance agents reported the title insurance premium on line 1108 of the 

HUD-1 Statement. Prior to January 1, 2010, the regulations governing the HUD-1 Statement 

permitted the amount reported on line 1108 to include costs for settlement services such as 

costs of researching the title or conducting the closing in addition to the premium for title 

insurance. Commonwealth refers to this undifferentiated amount as a “bundled charge.” 

Appellant’s Br. at 9. Indiana is in practice a “risk rate” state, which means that the title 

insurance premium does not include the costs for settlement services. Appellant’s App. at 

564. The risk rate traditionally includes a commission to the agent that sells the insurance

policy. Id. at 121. That is, the agent receives the premium from the policyholder, keeps a 

portion of it as a commission, and remits a portion to the insurer. Id.

The IDOI appointed Bose Government Strategies, LLC (“BGS”), to conduct the 

Examination. BGS conducted the Examination pursuant to the standards and procedures 

approved by the IDOI and the National Association of Insurance Commissioners (“NAIC”)

 

1 HUD refers to the United States Housing and Urban Development Agency. The HUD-1 Settlement 

Statement is required under section 4 of RESPA and 24 C.F.R part 3500 (Regulation X) of the Department of 

Housing and Urban Development regulations.
5

as required by Indiana law.

2

 The NAIC is the United States standard-setting and regulatory 

support organization, created and governed by the chief insurance regulators from all fifty

states, the District of Columbia, and five United States territories. Through the NAIC, state 

insurance regulators establish standards and best practices, conduct peer review, and 

coordinate regulatory oversight. 

The Examination included a review of Commonwealth’s operations and management, 

marketing and sales practices, underwriting and reporting practices, and producer licensing 

and agency relations. BGS interviewed key personnel and reviewed Commonwealth’s 

manuals, bulletins, agency agreements, agent audit program, audit files, HUD-1 Statements, 

remittance reports, and sample transaction files. BGS contracted with Aon Global Risk 

Consulting (“Aon”) to provide actuarial and statistical analysis.

 During the Examination, Commonwealth produced a memo (“the CPT Memo”) that 

described its “unique” program for pricing title insurance premiums, which it dubbed the 

“Cents Per Thousand” (“CPT”) program. Id. at 473-74. The CPT Memo provided in 

relevant part as follows:

[Commonwealth] has implemented a [CPT] program where an agent agrees to 

adhere to a special rate chart that sets forth only “remittance rates” which are 

to be paid to the underwriter. An agent pays “remittance rate” dollars to the 

underwriter based on this chart rather than relying on a more traditional 

method of: 1) calculating “premium” for title insurance based on a “premium” 

rate chart; 2) calculating and deducting a certain percentage as the agent’s 

commission; and 3) remitting the balance to the underwriter. .... Under [the

CPT] program, the underwriter never knows the premium that the agent 

charged the customer – the underwriter and agent only agree on a “remittance 

rate.” ....

 

2

 Ind. Code § 27-1-3.1-9(a).
6

[Commonwealth] has successfully devised a [CPT] program that ... permits 

complete discretion and flexibility for an agent to set title insurance rates for 

transactions that it insures ... and reduces state premium taxes paid by the 

underwriter. ... [A]gency contracts in Indiana have been drafted to incorporate 

the term “remittance rate” as the only amount due to the underwriter. For 

purposes of reporting premium however, the agency channel has made a 

decision to report Indiana premium as a rate of $1.00 dollar per thousand. 

There does not appear to be any connection between [the] “remittance” rate 

which is the amount that the agent pays to the underwriter, and the fictional 

premium rate of $1.00 dollar per thousand. The $1.00 per thousand 

“premium” rate is not referenced in any agency contract, nor is it a reflection 

of any fee actually collected or charged for title insurance in Indiana. It does 

appear that this fictional $1.00 per thousand is used as a “gross premium” to 

report premium to Indiana for the purpose of calculating premium taxes. ....

....

.... [I]f an agent reported only remittance amounts, it might be challenging for 

the underwriter to gather the actual premium rates charged on each transaction. 

Agents may prefer this program to a more traditional commission program 

because the agent has complete flexibility to quote prices to the consumers.

.... [T]he benefit to the consumer under this totally open pricing model may 

be difficult to identify. ... In today’s heavily scrutinized regulatory 

environment, it might be challenging to defend this pricing strategy as 

consumer friendly.

Id. The CPT program was implemented by Commonwealth’s Indiana State Agency Manager 

and Vice President Bryan Steckler. In December 2008, Fidelity National Financial, Inc., 

acquired Commonwealth and discontinued the CPT program. 

BGS interviewed Steckler, who stated that each agent was responsible for determining 

the premium charged to consumers. Steckler also stated that “the premium charged to the 

consumer during the CPT program was not specifically tied to risk.” Id. at 451. BGS also 

interviewed Vice President Eastern Division Manager Robert Wineman, who also advised 

that each agent determined the premium charged to the consumer and that Commonwealth 
7

did not monitor the premiums charged to ensure that such premiums were fair and proper to 

the consumer. Id. at 460.

After learning of the implementation of the CPT program, BGS examined premium 

rates for transactions in which Commonwealth simultaneously issued a title insurance policy 

to a lender and to an owner. BGS and Aon examined ninety-seven transactions for the years 

2005 through 2008 and 110 transactions for 2009. Aon compared “premiums charged on line 

1108 of HUD-1” with the remittance amount reported by the independent agent. Id. at 452. 

Aon “used information obtained through [BGS’s] review to determine variances between 

HUD-1 Premium and the Remit Total Premium and the implied result on underpaid and 

overpaid premium taxes for the Exam Period.” Id. at 452. Aon’s analysis showed that the 

HUD-1 premium was much higher than the remittance premium during 2005 through 2008. 

It also showed that Commonwealth underreported premiums for premium tax purposesfor all 

years. Based on a comparison between the HUD-1 premium and the remittance premium,

BGS and Aon calculated that Commonwealth underpaid an estimated $62,146 in premium 

taxes during the Examination period. 

Aon also compared the HUD-1 premium against the premium reporting method under 

the CPT program, which also indicated that Commonwealth underreported premiums. This 

comparison showed that Commonwealth underpaid an estimated $54,115 in premium taxes 

during the Examination period.

During the Examination, Commonwealth produced another memo dated June 28, 

2008, from Steckler to Commonwealth’s agents (“the Steckler Memo”) regarding completion 
8

of HUD-1 Statements. The Steckler Memo noted that some agents itemized charges for title 

searches and other costs on the appropriate lines, whereas others bundled all the charges with 

the title premium on line 1108. The Steckler Memo instructed agents that entered a bundled 

charge on line 1108 to designate in the parenthetical section directly beneath it the various 

line items that were included in the bundled charge line 1108. Id. at 482, 604. The reason 

for requiring that the costs included in the bundled charge be identified was to insure that

“we are all completing the HUD in a manner consistent with the way that it was intended to 

be filled out.” Id. 

Almost two years after commencing the Examination, BGS completed a draft market 

conduct examination report (“the Draft Report”). The IDOI delivered the Draft Report to 

Commonwealth on August 18, 2011, and informed it that it could respond to the Draft Report 

by submitting any records, documents, or papers, and by clarifying any business practices that

BGS may have misinterpreted. Id. at 335-416. Commonwealth submitted a response to the 

Draft Report, arguing that the findings were erroneous and objecting to the 

recommendations, but it did not submit any records, documents, or papers. Id. at 417-26. 

On September 22, 2011, BGS submitted a 138-page verified market conduct 

examination report (“the Final Report”) to the IDOI, which contained ten sets of findings, 

conclusions, and recommendations. BGS attached twelve exhibits, including the CPT 

Memo, the Steckler Memo, a total premium report, remittance reports, a HUD-1 Statement, 

an agency contract, agency audit program premium rate reviews, Aon’s calculations based on 

the HUD-1 Statements and remittance reports, Aon’s calculations based on the HUD-1 
9

Statements and the premium calculated as one dollar per one thousand dollars of coverage, 

and Aon’s calculations comparing the markup for coverage for lower coverage amounts with 

larger coverage amounts. Id. at 427-511. Each finding in the Final Report provided the 

applicable statutes, explained the information gathered and the methodology used to analyze 

it with references to the relevant exhibits, and provided a conclusion as to whether

Commonwealth violated any laws. Each conclusion was followed by a set of 

recommendations for curing the violations. 

Commonwealth submitted a response to the Final Report, in which it responded to 

each of the ten findings and conclusions. It also attached its response to the Draft Report and 

its correspondence with the IDOI and BGS regarding requests for documents. Id. at 512-55. 

On November 23, 2011, the IDOI issued the Administrative Order, in which it 

incorporated the Final Report and Commonwealth’s response. The Administrative Order 

provides in relevant part as follows:

The Cents Per Thousand Program

....

39) Under the CPT program, the underwriter never knows the premium that 

the agent charged the customer because both [Commonwealth] and agent have 

agreed on a remittance rate rather than a premium rate.

....

41) By instituting the CPT program, [Commonwealth] intentionally created 

an environment where agents were not required to report to [it] the premiums 

actually charged to consumers, but rather, the agent only remitted a contractual 

amount to [it] based upon coverage amounts.
10

42) The CPT program was intended as a way to allow agents to charge 

varying premiums to consumers based on factors such as the consumer’s 

sophistication, property location, and negotiations, rather than the risk borne by

[Commonwealth] in writing the title insurance.

43) Further, the CPT program was intended to reduce the amount of 

premium tax [Commonwealth] paid to the State of Indiana.

....

45) The CPT program does not require any direct correlation between the 

risk undertaken by [Commonwealth] and [the] cost of the policy the consumer 

pays on a specific piece of property.

46) Under the CPT program, [Commonwealth] assumed the premium 

charged to consumers was one dollar per one thousand dollars ($1.00/$1,000) 

of coverage.

47) There does not appear to be any connection between the “remittance”

rate and the fictional premium rate of one dollar per one thousand dollars 

($1.00/$1,000) of coverage.

Company Audits of Agents

....

52) [Commonwealth] performed regular audits of its contracted agents from 

January 1, 2005 through December 31, 2009.

53) When audits of agents revealed that premium rates charged to 

consumers differed from the one dollar per one thousand dollars, 

[Commonwealth] did not investigate further or amend its premium tax 

reporting.

....

Premium Tax Compliance

....

55) Bryan Steckler, Indiana State Agency Manager and creator of the CPT 

program advised during an interview that [Commonwealth] determined the net 
11

premium but the gross premium charged to the consumer was determined by 

the agent. He further stated in a sworn statement that the premium charged the 

consumer during the CPT program was not specifically tied to risk.

....

58) Agents must properly report premiums for a company to be in 

compliance with relevant statutes, laws and regulations. Through its audits of 

agents, [Commonwealth] had access to both remittance reports and HUD-1 

settlement statements used in real estate transactions to determine if its agents 

were accurately reporting premiums charged.

59) [Commonwealth] was aware of the need to set out matters included in 

the amount listed on HUD-1 forms and provided educational material to the 

agents on proper completion of these forms [the Steckler Memo] but failed to 

ensure compliance with the procedure.

....

61) [Commonwealth] inconsistently tested premiums charged by agents 

during its audits of agency operations.

62) [Commonwealth] defines premium in its contracts as the gross amounts 

of all fees and charges for title insurance in respect to policies. Indiana law 

applies the Gross Premium Privilege tax on the gross amount of all premiums 

received by [Commonwealth] on policies of insurance covering risk.

63) [Commonwealth] created a scenario in which [it] did not collect 

accurate information from its agents regarding premiums charged to 

consumers and therefore could not accurately report premium[s] to the IDOI or 

properly submit premium tax as required by Indiana law.

....

72) [Commonwealth] underpaid premium taxes in an amount between 

$54,115 and $62,146 for the examination period.

73) Based on [Aon’s] assumption [that] the CPT program was designed to 

properly consider [Commonwealth’s] costs for such coverage amounts and 

[Aon’s] analysis of the difference between the premium reported on the HUD1 and the premium calculated using the CPT program, [Aon] determined [that] 

[Commonwealth’s] mark-up on premiums charged to consumers for $0 -
12

$50,000 of coverage was 2.19 times higher than the mark-up in premiums 

charged to consumers for the $30,000 - $1,000,000 coverage range.

74) Based on the [Final Report] and workpapers, the Commissioner has 

reason to believe that the underpayment of premium taxes occurred in years 

other than the examination period stated in the examination warrant.

....

79) Findings of fact and conclusions made pursuant to any examination 

shall be prima facie evidence in any legal or regulatory action. Ind. Code § 27-

1-3.1-9(e).

....

CONCLUSIONS OF LAW

81) [Commonwealth] violated [the Rate Statute and the Unsafe Business 

Practices Statute] by:

a. Devising, allowing, and promoting an environment wherein it 

had no control over premiums charged to consumers for its title 

insurance by implementing the CPT program.

b. Permitting the charging of greater premiums per thousand 

dollars of coverage to consumers on smaller coverage amounts 

than those who purchased policies covering higher amounts[.]

c. Using the CPT program to allow agents to generate a fictitious 

premium not based on actuarial analysis at [Commonwealth] 

level.

d. Engaging in a practice of entering into agreements where its 

agents were permitted to set the final pricing of premiums to the 

consumer, resulting in great variance of premiums throughout 

the State.

82) [Commonwealth] violated [the Gross Premium Tax Statute] by failing 

to accurately determine and pay premium taxes on the gross amount of all 

premiums received by it on policies of insurance covering risks within this 

state[.]
13

....

ORDER

....

2) In order to cure [Commonwealth’s] violations of Indiana law, it 

must take the following actions.

3) [Commonwealth] shall insure compliance with Indiana rules, 

laws[,] and statutes through regular audits and incorporate premium charge 

analysis as part of its agency audit program.

4) [Commonwealth] shall file premium rates and policy forms with 

the IDOI for approval under procedures required of general property and 

casualty insurance companies. .... [Commonwealth] shall not use any rates 

until the rates have been approved by the IDOI.

5) [Commonwealth] shall provide educational materials to its 

agents regarding their duties and responsibilities relating to the use and 

charging of premium rates in [its] rate book or manual.

6) [Commonwealth] shall audit the accuracy of HUD-1 and 

remittance reports for coverage amounts to ensure proper consumer disclosure.

7) [Commonwealth] shall provide to [the IDOI] details of the 

actuarial analysis of premium rates or remittance rates charged to Indiana 

consumers during the period of this examination, January 1, 2005 through 

December 31, 2009[.]

8) [Commonwealth] shall recalculate its premium tax liability to the 

State of Indiana for January 1, 2005 through December 31, 2009, based on 

amounts actually charged by its agents rather than amounts reported to it by its 

agents, and submit that payment, with appropriate interest and penalties, to the 

IDOI[.]

9) [Commonwealth] shall calculate the premium tax due the State 

of Indiana back to January 1, 2000 through December 31, 2004, based on 

amounts actually charged by its agents rather than amounts reported to it by its 

agents, and submit that payment, with appropriate interest and penalties, to the 

IDOI[.]

....
14

11) [Commonwealth] shall provide confirmation to the IDOI by 

December 23, 2011, that it has discontinued the use of the CPT program. 

[Commonwealth] is prohibited from using the CPT program in the future.

12) [Commonwealth] shall incorporate premium charge analysis as 

part of its agency audit program.

Id. at 556-73 (citations and footnotes omitted).

Commonwealth filed a petition for judicial review of the Administrative Order and a 

memorandum in support thereof. Commonwealth also requested an order staying the 

enforcement of the Administrative Order pending final judgment of its petition, which the 

trial court granted. The IDOI filed a response and a brief in opposition to Commonwealth’s 

petition. Commonwealth filed a reply memorandum in support of its petition.

Following oral argument on Commonwealth’s petition and the parties’submissions of

findings of fact and conclusions of law, on January 29, 2013, the trial court issued its 

findings of fact, conclusions of law, and order (“the Order”), upholding the Administrative 

Order except for the portion ordering Commonwealth to recalculate the premium tax due for 

the pre-examination period. Specifically, the Order concluded that the IDOI properly 

interpreted Indiana’s insurance laws; that substantial evidence established that 

Commonwealth violated the Rate Statute, the Unsafe Business Practices Statute, and the 

Gross Premium Tax Statute; and that the IDOI ordered appropriate curative measures 

(except, as mentioned, the pre-examination tax recalculation requirement). The trial court 

also extended its previous order staying enforcement of the Administrative Order until the 

parties presented it with a copy of a final non-appealable order. Commonwealth appeals the 

trial court’s order. Additional facts will be provided as necessary.
15

Discussion and Decision

Standard of Review

Pursuant to the Administrative Orders and Procedures Act “(AOPA)”, the General 

Assembly has granted courts the power to review the actions of state government agencies, 

but the power of judicial review is limited. Robertson v. Ticor Title Ins. Co. of Florida, 982 

N.E.2d 9, 18 (Ind. Ct. App. 2012), trans. denied (2013). A court may only set aside agency 

action that is 

(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance 

with law; (2) contrary to constitutional right, power, privilege, or immunity; 

(3) in excess of statutory jurisdiction, authority, or limitations, or short of 

statutory right; (4) without observance of procedure required by law; or (5) 

unsupported by substantial evidence.

Ind. Code § 4-21.5-5-14(d). “A decision is arbitrary and capricious when it is made without 

any consideration of the facts and lacks any basis that may lead a reasonable person to make 

the same decision made by the administrative agency.” Ind. Dep’t of Envtl. Mgmt. v. 

Schnippel Constr., Inc., 778 N.E.2d 407, 412 (Ind. Ct. App. 2002), trans. denied (2003). 

“The burden of demonstrating the invalidity of agency action is on the party to the judicial 

review proceeding asserting invalidity.” Ind. Code § 4-21.5-5-14(a); see also Ind. Dep’t of 

Envtl. Mgmt. v. Conard, 614 N.E.2d 916, (Ind. 1993) (“The party challenging the 

administrative order bears the burden of showing that there are no substantial facts to support 

the agency’s finding.”). “Judicial review of disputed issues of fact must be confined to the 

agency record for the agency action[.] The court may not try the cause de novo or substitute 

its judgment for that of the agency.” Ind. Code § 4-21.5-5-11.
16

A reviewing court grants deference to the administrative agency’s findings of 

fact, but no such deference is accorded to the agency’s conclusions of law. 

However, an interpretation of statutes and regulations by the administrative 

agency charged with enforcing those statutes and regulations is entitled to 

great weight, and the reviewing court should accept the agency’s reasonable

interpretation of such statutes and regulations, unless the agency’s 

interpretation would be inconsistent with the law itself. Indeed, when a court 

determines that an administrative agency’s interpretation is reasonable, it 

should terminate its analysis and not address the reasonableness of the other 

party’s interpretation. Terminating the analysis recognizes the general policies 

of acknowledging the expertise of agencies empowered to interpret and 

enforce statutes and increasing public reliance on agency interpretations.

Ind. Dep’t of Envtl. Mgmt. v. Steel Dynamics, Inc., 894 N.E.2d 271, 274 (Ind. Ct. App. 2008)

(citations, quotation marks, and footnote omitted), trans. denied (2009).

As for our review of the trial court’s order, “to the extent the trial court’s factual 

findings were based on a paper record, this Court conducts its own de novo review of the 

record. If the trial court holds an evidentiary hearing, this Court defers to the trial court to 

the extent its factual findings derive from the hearing.” Equicor Dev., Inc. v. WestfieldWashington Twp. Plan Comm’n, 758 N.E.2d 34, 37 (Ind. 2001) (citation omitted). Here, the 

trial court held a hearing at which the parties presented oral argument in support of their 

positions, but it was not an evidentiary hearing. Consequently, we owe no deference to the 
17

trial court’s findings of fact.

3 We apply de novo review to questions of law, and owe no 

deference to the trial court on such inquiries. Kiel Bros. Oil Co. v. Ind. Dep’t of Envtl. 

Mgmt., 819 N.E.2d 892, 902 (Ind. Ct. App. 2004), trans. denied (2005).

Section 1- Interpretation of Relevant Statutes

Commonwealth contends that the trial court erred in accepting the IDOI’s 

interpretations of the Rate, Unsafe Business Practices, Gross Premium Tax, and Cure 

Statutes. We observe that

[a]n interpretation of a statute by an administrative agency charged with the 

duty of enforcing the statute is entitled to great weight, unless this 

interpretation would be inconsistent with the statute itself. .... Deference to an 

agency’s interpretation of a statute becomes a consideration when a statute is 

ambiguous and susceptible of more than one reasonable interpretation. When 

a court is faced with two reasonable interpretations of a statute, one of which is 

supplied by an administrative agency charged with enforcing the statute, the 

court should defer to the agency. If a court determines that an agency’s 

interpretation is reasonable, it should terminate its analysis and not address the 

reasonableness of the other party’s proposed interpretation. Terminating the 

analysis recognizes the general policies of acknowledging the expertise of 

agencies empowered to interpret and enforce statutes and increasing public 

reliance on agency interpretations. However, an agency’s incorrect 

 

3

 The parties debate our standard of review. Their debate appears to conflate the proper standard of

appellate review of a trial court’s findings of fact with that of a judicial court’s review of an administrative 

agency’sfindings of fact. To be clear, although we review the trial court’s findings of fact de novo in this case 

because the trial court’s Order is based on a paper record, our review of the IDOI’s findings of fact is subject to 

Indiana Code Section 4-21.5-5-14(d), which provides that we may not set aside an administrative order unless 

it is unsupported by substantial evidence, and Indiana Code Section 4-21.5-5-11, which provides that we will 

not try the cause de novo or substitute our judgment for that of the agency. The cases cited by Commonwealth 

that it argues support de novo review of an administrative agency’sfindings of fact are inapposite because they 

all refer to appellate review of trial court decisions based on a paper record. See Wayne Cnty. Prop. Tax 

Assessment Bd. of Appeals v. United Ancient Order of Druids-Grove No. 29, 847 N.E.2d 924, 926 (Ind. 2006); 

Equicor, 758 N.E.2d at 37; First Am. Title Ins. Co. v. Robertson, 990 N.E.2d 9, 11-12 (Ind. Ct. App. 2013), 

trans. granted. To the extent that Commonwealth argues that it was denied an evidentiary hearing, it does not 

assert that it ever requested a hearing. Although the IDOI had the discretion to call for an investigatory 

hearing, it was not required to do so. See Ind. Code § 27-1-3.1-11(a) (permitting the commissioner to adopt the 

examination report, reject it with directions to reopen the examination to obtain additional information, or call 

for an investigatory hearing). Commonwealth does not deny that it was offered an opportunity to provide 

rebuttal and/or explanatory evidence in response to both the Draft Report and the Final Report.
18

interpretation of a statute is entitled to no weight. If an agency misconstrues a 

statute, there is no reasonable basis for the agency’s ultimate action and the 

trial court is required to reverse the agency’s action as being arbitrary and 

capricious.

Pierce v. State Dep’t of Corr., 885 N.E.2d 77, 89 (Ind. Ct. App. 2008) (citations and 

quotation marks omitted).

The primary goal in statutory construction is to determine, give effect to, and 

implement the legislature’s intent. To effectuate legislative intent, we read the 

sections of an act together in order that no part is rendered meaningless if it 

can be harmonized with the remainder of the statute. [T]he statute or 

regulation must be construed as a whole looking to its object and policy. 

Words and phrases are taken in their plain, ordinary, and usual meaning unless 

a different purpose is manifested by the statute. Further, we presume that the 

legislature intended logical application of the language used in the statute, so 

as to avoid unjust or absurd results. 

Dev. Serv. Alts., Inc. v. Ind. Family & Social Servs. Admin., 915 N.E.2d 169, 181 (Ind. Ct. 

App. 2009) (citations and quotation marks omitted), trans. denied (2010). To the extent 

that Commonwealth specifically challenges the IDOI’s interpretation of the statutes and 

presents its own interpretation, we will address these in the following sections.

4

 

4

 Commonwealth contends that the trial court erred in failing to engage in any analysis of the Rate, 

Unsafe Business Practices, and Gross Premium Tax Statutes. Appellant’s Br. at 16. We disagree. The trial 

court set forth the appropriate standard of review and found that to the extent that the parties offered differing 

interpretations of the statutes, the IDOI’s interpretation of the statutes was reasonable and therefore terminated 

its analysis. Appellant’s App. at 25, 26, and 28 (conclusions 9, 10, 14, 20, and 25). Commonwealth claims 

that the trial court erred by deferring to the IDOI’s interpretation of the statutes because “[w]hile it is settled 

law that an agency’s interpretation of its statutes is entitled to deference, such deference is appropriate only 

when the interpretation is found to be consistent with the statute itself.” Appellant’s Br. at 17 (citing Dev. 

Serv. Alts., 915 N.E.2d at 181). We fail to see how the trial court could have concluded that the IDOI’s 

interpretation of the statutes was reasonable without first applying the rules of statutory construction and 

concluding that the IDOI’s interpretation was consistent with the statute. 
19

Section 2 - The Rate Statute

Commonwealth argues that the trial court erred in upholding the IDOI’s conclusion 

that Commonwealth violated the Rate Statute. The Rate Statute prohibitstitle insurers from

(7) Making or permitting any of the following: 

....

(C) Excessive or inadequate charges for premiums, policy fees, 

assessments, or rates, or making or permitting any unfair discrimination 

between persons of the same class involving essentially the same 

hazards, in the amount of premiums, policy fees, assessments, or rates 

charged or made for:

(i) policies or contracts of reinsurance or joint reinsurance, or 

abstract and title insurance.

Ind. Code § 27-4-1-4(a)(7)(C)(i).

The trial court concluded that

the administrative record establishes that Commonwealth violated the Rate 

Statute when its agents sold Commonwealth’s title insurance policies to 

Indiana consumers under the CPT program and charged premiums not based 

on actual risk rates but instead based upon the agent’s unfettered discretion in 

ascertaining factors such as the consumer’s sophistication, property location,

and negotiations, rather than the risk borne by Commonwealth.

Appellant’s App. at 26.

Commonwealth contends that there is no evidence in the record that it charged an 

excessive rate and that the Administrative Order lacks any finding that it charged an 

excessive rate. Commonwealth’s argument ignores the Final Report, which included 

numerous exhibits, detailed explanations of BGS’s and Aon’s methods of analyzing the data, 
20

and the conclusions drawn therefrom.

5

 The exhibits included the CPT Memo and an agency 

agreement, and the findings included information provided during interviews with 

Commonwealth representatives. Steckler told BGS that the premiums charged to the 

consumer during the CPT program were not specifically tied to risk. Steckler and Wineman 

told BGS that the agents determined the premium charged to the consumer, and Wineman 

stated that Commonwealth did not monitor the premiums to ensure that they were fair and 

proper. The Final Report reached the following relevant conclusions: (a) Commonwealth 

“has created a scenario in which [it] does not collect accurate information from its agents 

regarding premiums charged to consumers for title insurance coverage, and in which [it] does 

not oversee gross premiums charged by agents to consumers;” (b) there were discrepancies 

between the policy coverage amounts reported on HUD-1 Statements and the coverage 

amounts agents reported on agent remittance reports, so that Commonwealth could not 

determine whether an agent properly reported the premium charged to the consumer; (c) 

Commonwealth had “allowed and promoted an environment wherein it has no control over 

premiums charged to consumers for its title insurance coverage and premiums charged to 

similar consumers for similar coverage can vary greatly;” (d) Commonwealth “has engaged 

in a practice of entering into agreements with agents wherein agents are permitted to set the 

 

5

 Commonwealth does not suggest that the Final Report or the Draft Report were not in compliance

with Indiana Code Section 27-1-3.1-10, which requires that all examination reports be comprised of only:

(1) facts:

(A) appearing upon the books, records, or other documents of the company; and 

(B) ascertained from the agents or other persons examined, or as ascertained from the 

testimony of its officers or agents or other persons examined concerning the affairs of the 

company; and 

(2) conclusions and recommendations that the examiners find reasonable warranted from those facts.
21

final pricing of premiums to the consumer, resulting in great variance of premiums 

throughout the State;” (e) Commonwealth had a wide range of commission agreements, 

premium rate sheets, and remittance sheets and does not monitor the gross premiums charged 

to consumers to ensure that the charges comply with relevant laws and regulations; (f) 

“[s]uch practices of allowing agents to have different remittance and commission rates 

contribute[] to an environment which rewards excessive, unfair and/or discriminatory pricing 

with the consumer;” and (g) Commonwealth “permits the charging of greater mark-ups in the 

HUD-1 ultimate premiums on lower coverage amounts than on higher coverage amounts.” 

Id. at 451, 458, 460-62, 465. The Final Report contains ample evidence.

Commonwealth also argues that there is no evidence that it charged an unfairly 

discriminatory rate because the IDOI ignored the “of the same class” element in the Rate 

Statute, which, Commonwealth argues, refers to premiums with the same underlying cost 

structure. Commonwealth fails to acknowledge that this argument was previously presented

and rejected in Ticor, 982 N.E.2d 9. There, the IDOI conducted a target market examination 

of Ticor and ultimately found that it violated the Rate Statute by charging excessive and 

unfairly discriminatory premium rates. Ticor appealed, and the trial court vacated the IDOI’s 

administrative order, concluding in relevant part that “the Statutory Rate Standard is 

primarily a cost-based standard, requiring an analysis of an insurer’s costs as the central 

determination regarding whether the premium or rate charged for the insurer’s product is 

excessive or unfairly discriminatory.” Id. at 17. The trial court further concluded that the 

IDOI’s determination that Ticor charged premiums that were excessive and unfairly 
22

discriminatory was improper as a matter of law because the examiner had not done an 

analysis of the agents’ underlying costs in issuing such title insurance products. Id. at 17-18. 

The IDOI appealed the trial court’s order, arguing that the Rate Statute required title 

insurers to charge “comparable insurance premiums to insureds purchasing the same amount 

of title insurance.” Id. at 19. The Ticor court concluded that the IDOI’s interpretation of the 

Rate Statute was reasonable and that “Ticor violated the Rate Statute by allowing its agents 

to charge different premium rates to Indiana consumers that are of the same class and involve 

the same risk.” Id. at 23 (citation and quotation marks omitted). The Ticor court reversed 

the trial court’s order and reinstated the administrative order.

Commonwealth acknowledges in its reply brief that Ticor construed the Rate Statute, 

but asserts that Ticor is irrelevant because in this case the IDOI made no findings that 

Commonwealth’s premiums were excessive or unfairly discriminatory.6 In our view, Ticor

directly addressed and rejected Commonwealth’s argument that the underlying cost structure 

must be calculated to determine whether premiums were unfairly discriminatory.

Contrary to Commonwealth’s assertion that the Administrative Order lacks findings 

that it charged excessive and unfairly discriminatory rates, findings 42, 45, 55, 63, 73, and 

conclusion 81(c) and -(d) are relevant to whether Commonwealth permitted excessive and 

unfairly discriminatory rates and thereby violated the Rate Statute. We conclude that 

Commonwealth has failed to carry its burden to show that the IDOI’s determination that 

 

6

 In stark contrast to its argument in this appeal, Commonwealth argued to the trial court that Ticor

was dispositive. At that time, Ticor was favorable to Commonwealth’s position because the trial court had 

ruled in favor of Ticor but our appellate opinion had not yet been handed down.
23

Commonwealth violated the Rate Statute is not supported by substantial evidence. 

Commonwealth also objects to the measures imposed to cure this violation, which we will 

address in Section 5 with its other objections related to the Cure Statute.

Section 3 -The Unsafe Business Practices Statute

Commonwealth challengesthe trial court’s decision upholding the IDOI’s conclusion 

that Commonwealth violated the Unsafe Business Practices Statute, which provides,

Every insurance company to which this article is applicable:

(1) shall conduct and transact its business in a safe and prudent manner;

(2) shall maintain such company in a safe and solvent condition; and

(3) shall establish and maintain safe and sound methods for the conduct 

of such insurance company and its business and prudential affairs.

Ind. Code § 27-1-3-4.

The trial court made the following relevant conclusions:

17. [T]he administrative record establishes that Commonwealth violated 

the Unsafe Business Practices Statute by entering into agreements where its 

agents were permitted to set the final pricing of premiums to the consumers, 

resulting in great variance of premiums throughout the State utilizing a Cents 

per Thousand program that generated fictitious premium[s] not based on 

actuarial analysis at Commonwealth’s level.

18. Moreover, Commonwealth failed to properly determine insurability 

and did not use sound underwriting practices when issuing certain policies, and 

also failed to audit its agents, or require them to maintain accurate records, so 

that in many instances the examiners had no way of determining what 

premiums Commonwealth agents had actually charged Indiana consumers.

19. The IDOI’s determination that Commonwealth violated the Unsafe 

Business Practices Statute is consistent with the NAIC standard that “wide

scale application of incorrect rates” are “indicative of inadequate management 

oversight.” NAIC, Market Regulation Handbook 346 (2011).

Appellant’s App. at 27 (citations, quotation marks, and brackets omitted).
24

Commonwealth refers to the Unsafe Business Practices Statute as the Insolvency 

Statute, and argues that there is no evidence that it “was operating its business in [a] fashion 

that jeopardized its solvency.” Appellant’s Br. at 32.7 The underlying unstated assumption 

of this argument is that the Unsafe Business Practices Statute applies only to solvency 

concerns, but Commonwealth fails to articulate why the statute should be so limited. 

Commonwealth’s argument ignores item 3, which requires safe and prudent business 

practices and item 4, which requires safe and sound methods for conducting business and 

prudential affairs. The NAIC states that “Market regulation is regulatory oversight that 

primarily focuses on regulated entities’ compliance with laws and regulations other than 

those related to financial solvency. Market regulation complements financial solvency 

regulation.” Market Conduct Regulation, http://www.naic.org/cipr_topics/topic_market_

conduct_regulation.htm (last visited Feb. 6, 2014). Accordingly, we do not accept the 

assumption that the IDOI was required to make findings that Commonwealth’s business 

practices threatened its solvency in order to determine that it violated the statute.

Commonwealth also argues that the trial court improperly relied upon conclusory 

statements in the Administrative Order and that there is no evidence in the record to support 

 

7

 The IDOI asserts that Commonwealth did not present this argument to the trial court, and therefore it 

is waived. In its reply brief, Commonwealth argues that it “asserted below that the Insolvency Statute ‘pertains 

to fiscal management and solvency.’” Appellant’s Br. at 18 (citing Appellant’s App. at 134). Whether this 

single statement constitutes an argument is questionable, but given our preference for determining issues on the 

merits, we will address Commonwealth’s solvency argument.
25

the finding that it violated the Unsafe Business Practices Statute. To the contrary, the

administrative record includes the CPT Memo and other evidence relating to the CPT 

program. In addition, the Final Report concluded that “Commonwealth inconsistently tested 

premiums charged by agents during its audit of agency operations” and that Commonwealth 

“has created a scenario in which [it] does not collect accurate information from its agents 

regarding premiums charged to consumers for title insurance coverage, and in which [it] does 

not oversee gross premiums charged by agents to consumers.” Appellant’s App. at 448, 451.

Commonwealth argues that it is not required by law to audit its agents. Setting aside the 

issue of whether Commonwealth is legally required to audit its agents, the fact is that it did

audit its agents, and it is the manner in which it performed those audits which the IDOI found 

to violate the Unsafe Business Practices Statute. The IDOI points out that Commonwealth 

does not and cannot deny that its poor record keeping and auditing are not safe and prudent. 

We conclude that Commonwealth has failed to carry its burden to show that the IDOI’s 

determination that Commonwealth violated the Unsafe Business Practices Statute is not 

supported by substantial evidence. We will address Commonwealth’s objections to the 

measures imposed to cure this violation in Section 5.

Section 4 - The Gross Premium Tax Statute

Commonwealth claims that the trial court erred in upholding the IDOI’s determination 

that it violated the Gross Premium Tax Statute, which provides in relevant part,

Every insurance company not organized under the laws of this state ... and 

doing business within this state shall, on or before March 1 of each year, report 

to the department, under the oath of the president and secretary, the gross 
26

amount of all premiums received by it on policies of insurance covering risks 

within this state.

Ind. Code § 27-1-18-2. Premium is defined as

money or any other thing of value paid or given in consideration to an insurer, 

insurance producer, or solicitor on account of or in connection with a contract 

of insurance and shall include as a part but not in limitation of the above, 

policy fees, admission fees, membership fees and regular or special 

assessments and payments made on account of annuities.

Ind. Code § 27-1-2-3(w).

Commonwealth asserts that there is no evidence in the administrative record that it 

received premiums other than the amounts actually remitted to it by its agents as reflected in 

the agent remittance reports. Commonwealth’s argument confuses the remittance amount 

with “the gross amount of all premiums.” Ind. Code § 27-1-18-2. Commonwealth’s agency 

agreements provide that “[a]gent shall be responsible for the collection of the gross amounts 

of all fees and charges for title insurance in respect to [of] Policies issued by AGENT

(Hereinafter termed “Premiums”),” and “[u]pon collection of Premiums by Agent, 

[Commonwealth] shall be deemed the owner of the entire amount thereof.” Appellant’s App. 

at 575 (emphasis added). Thus, pursuant to its own agency agreements, “the gross amount of 

all premiums” received by Commonwealth was the gross premiums collected by their agents, 

not the remittance amount. As such, the amount in the agency remittance reports is irrelevant 

in determining whether Commonwealth paid the correct amount of gross premium tax. We 

conclude that Commonwealth has failed to carry its burden to show that the IDOI’s 

determination that Commonwealth violated the Gross Premium Tax Statute is not supported 
27

by substantial evidence.8 We will address Commonwealth’s objections to the measures 

imposed to cure this violation in the following section.

Section 5 - The Cure Statute

Commonwealth contends that the trial court erred in failing to interpret the Cure 

Statute or enter any conclusions of law as to the IDOI’s interpretation of such statute. The 

Cure Statute provides, “If the examination report reveals that the company is operating in 

violation of any law, regulation, or prior order of the commissioner, the commissioner may 

order the company to take any action the commissioner considers necessary and appropriate

to cure that violation.”9 Ind. Code § 27-1-3.1-11 (emphases added). The crux of the parties’ 

debate is whether “any action” authorizes the particular cures ordered by the IDOI. 

Section 5.1 - Cures Imposed for Violation of the Rate Statute

First, Commonwealth contends that the trial court erred in concluding that the IDOI 

was authorized to require that Commonwealth file its premium rates with the IDOI for 

approval. Commonwealth contends that “any action” cannot as a matter of law include the 

requirement that it seek rate approval from the IDOI because title insurers are specifically 

exempted from such an obligation. According to Commonwealth, Chapter 22 of Article I of 

 

8

 Commonwealth also argues that where the agent provided a bundled charge on line 1108 of the 

HUD-1 Statement, the IDOI had to make certain assumptions as to which portion of the amount was sales

commission versus settlement charges. Appellant’s Br. at 38. The IDOI asserts that Commonwealth raises this 

argument for the first time on appeal, and therefore it is waived. We agree. See GKC Indiana Theatres, Inc. v. 

Elk Retail Investors, LLC, 764 N.E.2d 647, 652 (Ind. Ct. App. 2002) (“A party generally waives appellate 

review of an issue or argument unless the party raised that issue or argument before the trial court.”).

9

 The language follows NAIC’s Model Law on Examinations verbatim. NAIC, Model Laws, 

Regulations and Guidelines 390-4 (2012). 
28

the Insurance Code (“the Rate Regulation Chapter”) requires property and casualty insurers 

to “file with the commissioner every manual of classifications, rules, and rates, every rating 

schedule, every rating plan, and every modification of any of the foregoing which it proposes 

to use.” Ind. Code § 27-1-22-4(a). However, Commonwealth contends, title insurers are 

specifically exempted from the requirement to files their rates with the IDOI for approval 

because Indiana Code Section 27-1-22-2(a)(6) specifically providesthat the Rate Regulation 

Chapter does not apply to title insurers.

Commonwealth’s argument fails to acknowledge that effective July 1, 2013, the 

General Assembly amended Section 27-1-22-2(a) to add title insurers to the list of insurers 

subject to the Rate Regulation Chapter and deleted subsection (6).10 Pub. Law 80-2013, § 1. 

Thus, as of today, title insurers are statutorily required to file rates for approval (the IDOI 

refers to this as “file and use”). Commonwealth asserts that this file and use regime does not 

equate with the Administrative Order’s imposition of a prior approval regime (referred to as 

“file and approve”). However, the General Assembly added Section 27-1-22-28(d), which 

provides that for policies issued after June 30, 2014, title insurers will be required to file rates 

for approval prior to implementing them. Pub. Law 80-2013, § 2. The IDOI agrees that if 

this appeal concludes before June 30, 2014, it will waive the right to require Commonwealth 

to obtain prior approval of its rates. Appellee’s Br. at 51 n.10. Accordingly, 

 

10

 Indiana Code Section 27-1-22-2(a) now reads, “This chapter applies to ... all forms of title 

insurance.”
29

Commonwealth’s argument against the requirement that it file its rates for prior approval is 

moot.

Commonwealth also argues that the trial court erred in concluding that the IDOI had 

the authority to require Commonwealth to perform a retrospective actuarial analysis of its 

rates. Commonwealth argues that the Cure Statute does not authorize the IDOI to require it 

to perform a retrospective actuarial analysis of its rates because “[n]othing within this

language authorizes the IDOI to require compliance with obligations beyond those contained 

within the Insurance Code.” Appellant’s Br. at 26. The IDOI argues that the plain language 

of the Cure Statute demonstrates that the General Assembly did not intend to limit the IDOI’s 

authority in the manner Commonwealth asserts. We agree with the IDOI.

As previously stated, the Cure Statute provides that “the commissioner may order the 

company to take any action the commissioner considers necessary and appropriate to cure 

that violation.” Ind. Code § 27-1-3.1-11 (emphases added). The plain, ordinary, and usual 

meaning of the word “any” does not even remotely suggest that the actions the IDOI may 

order are limited solely to those that are specifically required by statute.

11

 However, the IDOI 

does not contend that its curative power is unlimited. The Cure Statute requires that any

action ordered by the IDOI must be “necessary and appropriate” to cure the violation. We 

 

11

 Commonwealth asserts that the Insurance Code provides the IDOI with specific measures it can 

order a title insurer to take upon finding a violation, citing Indiana Code Section 27-4-1-6, which provides that 

following a hearing under Indiana Code Section 4-21.5-3, the IDOI shall order the insurer to cease and desist 

the conduct found to violate the Code and may (1) order the insurer to pay fines and penalties and (2) suspend 

or revoke an insurer’s license. Not surprisingly, these severe measures may not be imposed absent a hearing. 

Presumably, the Cure Statute provides authority for the IDOI to order less severe actions where a hearing is not 

required. If the legislature had intended to limit the IDOI to the measures listed in Section 27-4-1-6 and to 

measures already legally required, it would have not have used “any action” in the Cure Statute.
30

conclude that the IDOI’s interpretation of the Cure Statute is reasonable and terminate our 

analysis. 

Commonwealth next contends that because the CPT program has been discontinued, a 

retrospective actuarial analysis of its rates is unnecessary. The IDOI asserts that a 

retrospective actuarial analysis is necessary and appropriate to cure Commonwealth’s 

violation of the Title Rate Statute because (1) the Examination was based on a mere sampling 

of transactions and (2) Commonwealth’s poor auditing hindered an accurate assessment of 

the actual rates charged to consumers, and therefore additional violations of the Insurance 

Code could have occurred when the CPT program was in effect. We agree with the IDOI. 

We conclude that Commonwealth failed to carry its burden to show that the IDOI does not 

have authority under the Cure Statute to order it to perform a retrospective actuarial analysis

of its rates. 

Section 5.2 - Cures Imposed for Violation of the Unsafe Business Practices Statute

Commonwealth next challenges the IDOI’s requirement that it audit its agents as a 

curative measure for its violation of the Unsafe Business Practices Statute. The trial court 

concluded as follows:

28. The Commissioner was within his authority to order that 

Commonwealth shall ensure compliance with Indiana rules, laws and statutes 

through regular audits, including auditing the accuracy of HUD-1 and 

remittance reports for coverage amountsto ensure proper consumer disclosure 

of amounts charged, and also incorporating a premium charge analysis as part 

of its agency audit program. In effect this is nothing more than a directive for 

Commonwealth to ensure that its agents properly fill out one of 

Commonwealth’s already existing forms, which also requires the “test of 

remittances in states like Indiana be based upon the schedule of rates in the 

agent’s contract.
31

Appellant’s App. at 29 (emphasis added) (citations omitted).

Commonwealth contends that title insurers are not required to audit independent title 

professionals, citing Fidelity National Title Insurance Co. v. Mussman, 930 N.E.2d 1160 

(Ind. Ct. App. 2010), trans. denied (2011). Commonwealth recognizes that in Mussman, this 

Court “held that, while an independent title professional was a title insurer’s agent for 

purposes of issuing title insurance policies, it was not the title insurer’s agent for other 

purposes, such as providing escrow and closing services.” Appellant’s Br. at 36. Given that

an independent title professional is a title insurer’s agent for purposes of issuing title 

insurance and that Commonwealth was ordered only to audit the accuracy of HUD-1 

Statements and remittance reports for the amount of title insurance coverage to confirm that 

consumers were charged the correct premium according to its schedule of rates,

Commonwealth fails to persuade us that this cure is not necessary and appropriate.

Commonwealth also argues that the IDOI is not authorized to order it to incorporate 

premium charge analysis as part of its agency audit program. The trial court concluded, and 

Commonwealth does not contest, that the premium charge analysis means nothing more than 

that Commonwealth insure that its agents fill out one of its already existing forms. 

Commonwealth fails to persuade us that the IDOI does not have authority to order it to audit 

its agents utilizing premium charge analysis.

Section 5.3 - Cures Imposed for Violation of the Gross Premium Tax Statute

Lastly, Commonwealth challenges the order to recalculate its premium tax liability for 

the Examination period based on amounts actually charged by its agents. Commonwealth 
32

asserts that it has already paid the larger estimated amount of premium tax due, and therefore 

an audit of every title insurance transaction during the Examination period is excessive and 

unnecessary. Commonwealth’s argument ignores the reason that the trial court upheld this 

cure. The trial court concluded,

32. Finally, the [IDOI] was within [its] authority to order Commonwealth to 

recalculate its premium taxes, paying the appropriate amount (with appropriate 

interest and penalties, if applicable for the Examination period. Although 

Commonwealth has remitted the disputed amount of allegedly underpaid 

premium calculated by the [IDOI], along with interest and penalties, this 

payment was based on a sampling of Commonwealth’s files during a market 

conduct examination, as opposed to a recalculation of premium taxes 

potentially due and owing as a result of every actual transaction.

Appellant’s App. at 30 (citations and quotation marks omitted). The CPT program, by its 

own terms, “reduces state premium taxes paid by the underwriter,” and BGS looked only at a 

sample of transactions. Id. at 473. Therefore, Commonwealth has failed to carry its burden 

to show that it is not necessary or appropriate for it to determine the actual amount of 

premium taxes that was due. We conclude that the IDOI was within its authority to order 

Commonwealth to recalculate its premium tax liability for the Examination period.

Conclusion

We conclude that substantial evidence supports the IDOI’s determination that 

Commonwealth violated the Rate Statute, the Unsafe Business Practices Statute, and the 

Gross Premium Tax Statute. We further conclude that the cures imposed by the IDOI for 

Commonwealth’s violations of these statutes are authorized by the Cure Statute. Therefore, 

we affirm the trial court’s order. 
33

Affirmed.

BARNES, J., and PYLE, J., concur.