The state Public Regulation Commission wants the Legislature to consider title-insurance reform during January's 30-day session.

All five commissioners, including Chairman Ben R. Luján, who represents Santa Fe, signed a letter to Gov. Bill Richardson this week asking him to place the subject on the legislative agenda. The commission made the request because the state's title insurance laws need to be changed, according to the letter.

Consumers would benefit if there was price competition in the title insurance industry, the letter says. The state superintendent of insurance sets New Mexico's title insurance rate after a hearing each year, and it is uniform among all companies.

Consumers also would benefit if the industry were no longer immune from lawsuits alleging losses due to negligence, the letter says.

"This is a complex issue, since many potential errors and omissions will be compensated under the title insurance policy," the letter says. "However, when errors occur that relate to the search performed for the policy but fall outside the policy language, customers are now left high and dry."

Other types of insurance companies are not immune from negligence suits, the letter notes.

Ed Roibal, executive director of the New Mexico Land Title Association, said the association opposes putting title insurance issues on the governor's legislative call.

Although prices at New Mexico title insurance companies are the same, competition within the industry based on service and quality is fierce, Roibal said.

Also, about one-third of the states do not let consumers sue title insurance companies over negligence, he said.

The practice would let consumers "double dip" because they could collect from their title insurance policy and also from a negligence suit, Roibal said. Also, there is no limit to negligence damages, he said.

"By declaring open season on title-insurance companies, the cost would be passed on to the consumer," Roibal said.

The commission's letter comes on a tide of support for title insurance reform in New Mexico. Last month, Attorney General Gary King called for reform, and Think New Mexico, a nonprofit think tank, released a report in September that, among other suggestions, called for price competition in the industry.

In addition, three New Mexico consumers have filed class-action lawsuits calling for lower title-insurance rates. New Mexico has the 15th most expensive title insurance rates in the country, according to 2007 information compiled from BankRate.com. The cost of an average title insurance policy in New Mexico is $755.27, while the national average is $707.30.

New Mexicans could save $40 million a year through title-insurance reforms, according to Think New Mexico.

Fred Nathan, executive director of Think New Mexico and an author of its report, said the organization is working with PRC officials and others interested in reform to come up with legislation for the 30-day session.

Members of the governor's media relations staff did not return phone calls Friday seeking comment on the PRC letter.

Contact Wendy Brown at 986-3072 or wbrown@sfnewmexican.com.