LandAmerica Financial Group today said it will refund some $3 million to consumers and pay a $560,280 fine as part of an agreement with the Nevada Division of Insurance to resolve the division’s concerns about captive reinsurance practices.
The agreement includes some $3 million in refunds to Nevada home buyers, according to spokeswoman Lloyd Osgood, and the creation of a program in concert with the state to educate consumers about title insurance. The company said this settlement is included within the reserves it established in June 2005 to cover “anticipated exposure to regulatory matters.”
Title insurance took the spotlight when Erin Toll, Colorado’s deputy insurance commissioner, in February 2005 investigated nine Colorado title insurers for alleged kickback schemes said to result in overcharges to consumers. The probe sparked dozens of investigations nationwide, in Florida, Washington, Hawaii, California, Oklahoma, Minnesota, Washington and other states.
Toll testified before the U.S. House Financial Services subcommittee April 26 in a hearing held to air mounting concerns about the title industry set in motion largely by her probe.
Toll and LandAmerica are in the process of negotiating a settlement relating to the Colorado Insurance Commission’s probe of LandAmerica.
Under the settlement with Nevada’s insurance division, LandAmerica will partner with the division to create a customized consumer education program to help Nevada consumers understand title insurance and highlight choices available to them, the company said today.
“We appreciate the willingness of the Nevada (Division of Insurance) to work with us to resolve this matter so that consumers receive the ultimate benefit from the education program we are creating under the direction of the Nevada Commissioner of Insurance,” said Theodore L. Chandler Jr., LandAmerica’s president and chief executive officer, in a statement.
“We are pleased to work with Commissioner Molasky-Arman and the Nevada DOI to educate consumers on the value of title insurance and on their ability to choose a title insurance provider. Together, we will work to ensure that homeowners across Nevada understand how title insurance can protect what is likely the largest investment most homeowners will ever make. This customized education program will enhance competition and demonstrate to consumers the options available to them to insure the smooth transfer of title when buying a home,” Chandler said.
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