Posted by Charm_AL on 5/5/05 3:50pm
Msg #36075
noooo.....kickbacks?
The first steps toward a national investigation of title insurance kickbacks and fees were taken Sunday in Salt Lake City at a national insurance regulators' convention, the Denver Post reported.
State regulators at a National Association of Insurance Commissioners conference said title industry investigations by Colorado and other states are generating national attention on the issue, the Post reported.
The appearance of 150 regulators and industry officials at a meeting of a title insurance subcommittee that normally attracts only a few participants demonstrated the new interest in the subject, the Post said.
Regulators have been probing a series of alleged phony reinsurance contracts between title companies and subsidiaries of real estate agents, developers and lenders. Under these alleged elaborate schemes, the title insurers agreed to give about half of the premium on title insurance policies to captive reinsurance companies created by the other conspirators. The parent companies of those captives would in turn refer business to the title insurer.
Public testimony at Sunday's meeting, followed by a closed session, will set the agenda for a coordinated effort by regulators to examine title-insurance practices and their effect on consumers, according to the Post.
"This is very much a national issue," Woody Girion, a deputy insurance commissioner from California, told the Post. Along with Colorado and Washington state, California has been particularly aggressive in its examination of the title industry. A number of other states, including Florida, also have launched investigations.
Last week, California Insurance Commissioner John Garamendi issued nine subpoenas to six companies as part of his ongoing investigation of illegal kickbacks in the title insurance industry, the agency said today. The subpoenas follow four others that were issued in February to LandAmerica companies and Fidelity National Title, two of the largest title insurers in the country.
The commissioner, co-chair of the Title Insurance Working Group within the National Association of Insurance Commissioners, has been working with Colorado and Washington state insurance regulators to probe the alleged phony reinsurance contracts.
Colorado has reached a $24 million financial settlement with one of the title companies, First American Title, on behalf of all the company's customers nationally whose title policies were part of the scheme. The company has denied wrongdoing.
Officials of two of the title companies identified in the Colorado probe, Fidelity Title and LandAmerica Title, were present at Sunday's hearing but declined to comment, the Post reported.
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