LandAmerica Financial Group has agreed to refund title insurance premiums to 922 Colorado residents who state regulators said were victims of captive reinsurance practices that provided kickbacks to lenders and home builders. The $241,000 settlement with the Colorado Division of Insurance includes $139,000 in premium refunds, $36,880 in penalties, $15,000 to reimburse the state for the cost of its investigation, and a $50,000 donation to a local charity that addresses low-income housing and foreclosure issues. Colorado regulators say lenders and home builders affiliated with Citigroup and Ryland Home agreed to refer all of their title insurance business to LandAmerica, on the understanding that LandAmerica would "reinsure" the policies with businesses established by the lenders and home builders. Such "captive reinsurance" arrangements are designed to generate rebates or kickbacks for the lenders and home builders, which are prohibited under state and federal law. Colorado i...
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