Industry News

California probes title insurance kickback scheme

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California Insurance Commissioner John Garamendi is issuing subpoenas to parties he believes are involved in kickback activities, the commissioner said Tuesday. Also, he is investigating Fidelity National Title and LandAmerica companies for possible involvement in the alleged scam, Garamendi said. Garamendi said he has been working with the Colorado and Washington insurance regulators to probe a series of "phony 'reinsurance' contracts between title companies and subsidiaries of Realtors, developers and lenders." The commissioner did not name the companies that would be subpoenaed. "Under these 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," Garamendi said in a statement. "The parent companies of these 'captives' would in turn refer business to the title insurer." Garamendi said these arrangements were designed to "kick back" a large share of the title insu...