16161. Land Title Insurance in India: Lessons from U.S. Regulatory Approaches
- Author:
- Anirudh Burman
- Publication Date:
- 08-2020
- Content Type:
- Working Paper
- Institution:
- Carnegie Endowment for International Peace
- Abstract:
- India’s insurance market for land titles is still in the early stages of development. Borrowing from the U.S. model, here’s what Indian insurers and officials alike can do to keep the market flourishing and protect consumers. The poor quality of land title records in India is a significant impediment for growth and urbanization. Bad land title records result in excessive litigation, property disputes, and cases of fraud. This in turn affects the cost and certainty of transactions that involve land and real estate. While the Indian government has been operating a land record modernization program for over a decade, progress has been slow. This paper accordingly proposes that land title insurance be encouraged to reduce losses in land transactions. Title insurance will also provide buyers of land and real estate a mechanism for mitigating the risks that arise from such transactions. Insurance products cannot be launched in India without prior registration with the insurance regulator, the Insurance Regulatory and Development Authority of India (IRDAI). So far, IRDAI has registered some title insurance products, and it is now in the process of developing a general regulatory framework for the product. Once in place, this regulatory framework will determine the development of the title insurance market and consequently its ability to solve issues related to land transactions. Therefore, it is important that the regulatory framework adopted be suitably tailored to the unique characteristics of land title insurance as a product. In addition, the regulatory framework must give due regard to the incipient nature of the market in India. While title insurance is a new product in India, it is widely used in the United States. India’s regulatory framework can therefore be better informed by an examination of title insurance regulation in the United States. This is especially so given that insurance in the United States is determined at the state level, so different states follow different models of regulation. This diversity provides an opportunity to better understand how title insurance should be regulated given the local environment.
- Topic:
- Urbanization, Regulation, Land, and Insurance
- Political Geography:
- South Asia, India, North America, and United States of America