Fidelity National Title Group, Inc. (NYSE:FNT)
Industry: Financial
Fidelity National Title Group, Inc. (FNT), incorporated on May 24, 2005, is a title insurance company in the United States. The Company's title insurance underwriters are Fidelity National Title, Chicago Title, Ticor Title, Security Union Title and Alamo Title. FNT's title business consists of providing title insurance and escrow and other title-related products and services arising from the real estate closing process. The Company's operations are conducted on a direct basis through its own employees who act as title and escrow agents and through independent agents. In addition to its independent agents, FNT's customers are lenders, mortgage brokers, attorneys, real estate agents, home builders and commercial real estate developers. On August 1, 2005, the Company acquired Service Link, L.P. (Service Link), a national provider of centralized mortgage and residential real estate title and closing services to financial institutions and institutional lenders. Title Insurance The Company provides title insurance services through its direct operations and through independent title insurance agents who issue title policies on behalf of its title insurance companies. FNT's title insurance companies determine the terms and conditions upon which they will insure title to the real property according to their underwriting standards, policies and procedures. In the Company's direct operations, the title insurer issues the title insurance policy and retains the entire premium paid in connection with the transaction. FNT has approximately 1,500 offices throughout the United States primarily providing residential real estate title insurance. The Company's commercial real estate title insurance business is operated through its direct operations. FNT maintains direct operations for its commercial title insurance business in all the major real estate markets, including New York, Los Angeles, Chicago, Atlanta, Dallas, Philadelphia, Phoenix, Seattle and Houston. In FNT's agency operations, the search and examination function is performed by an independent agent or the agent may purchase the search and examination from the Company. In either case, the agent is responsible to ensure that the search and examination is completed. The agent thus retains the majority of the title premium collected, with the balance remitted to the title underwriter for bearing the risk of loss in the event that a claim is made under the title insurance policy. FNT's relationship with each agent is governed by an agency agreement defining how the agent issues a title insurance policy on its behalf. The agency agreement also sets forth the agent's liability to the Company for policy losses attributable to the agent's errors. An agency agreement is usually terminable without cause upon 30 days' notice or immediately for cause. FNT also conducts periodic audits of its agents. The Company's direct operations are divided into approximately 244 profit centers consisting of more than 1,500 direct offices. Each profit center processes title insurance transactions within its geographical area, which is usually identified by a county, a group of counties forming a region, or a state, depending on the management structure in that part of the country. FNT also transacts title insurance business through a network of over 10,000 agents. Escrow and Other Title Related Fees FNT derives a significant amount of its revenues from escrow and other title-related services, including closing services. The escrow and other services provided by the Company include all of those typically required in connection with residential and commercial real estate purchase and refinance activities. Escrow and other title-related fees represented approximately 18.4% of FNT's revenues during the year ended December 31, 2005. Escrow and other title-related fees are primarily generated by the Company's direct title operations. Reinsurance and Coinsurance In a limited number of situations, FNT limits its maximum loss exposure by reinsuring certain risks with other title insurers u
As Of: 10/07 00:00 ET
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