Industry News

Real estate could face government scrutiny for payoffs

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At the center of the expanding probe of the insurance industry by New York Attorney General Eliot Spitzer and now California Insurance Commissioner John Garamendi is the issue of steering business from brokers to insurance companies for financial gains. The real estate connection may not be too far off. The investigation may have already led to the doorsteps of insurance brokers who steer homeowners insurance business to specific insurance companies in exchange for fees. Last night, California commissioner John Garamendi implied he would take action on at least one insurance broker and that he would propose new regulations that would require insurance brokers to disclose all compensation from insurance companies and explicitly prohibit brokers from steering business to insurers in exchange for payoffs. If these types of investigations of payoffs and fees deepen, the real estate angle could be broader than homeowners insurance. The widening scope of regulators' concern could easily fin...