Fidelity National Financial has settled Colorado’s investigation of alleged title insurance-related kickbacks, agreeing to pay about $1.2 million to consumers nationwide, Colorado’s Insurance Commission reported.
In the settlement agreement, Fidelity, which already terminated its captive reinsurance treaties as part of the probe, agreed to refund about $1.2 million to consumers in approximately 18 states, without admitting wrongdoing.
The company also agreed to continue to refrain from such captive insurance arrangements and not enter into new ones, unless it can get a court order saying the arrangements are legal.
The Colorado investigation of nine title insurers, including Fidelity, led to the earlier refunding of about $24 million to consumers by First American Title Insurance Co., and sparked dozens of similar investigations nationwide in states including Florida, Washington, California, Oklahoma, Minnesota and Washington.
The companies are accused of 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. The alleged arrangements harm consumers by potentially forcing up title insurance rates.
Last Wednesday, the Arizona Department of Insurance said Fidelity National Title Insurance Group had agreed to refund more than $600,000 to nearly 4,000 title insurance policyholders in Arizona as a result of a multistate settlement.
In July, Fidelity reached a settlement with the California Department of Insurance following the agency’s investigation into captive reinsurance practices. While admitting no wrongdoing, Fidelity agreed to refund approximately $7.7 million to those consumers whose California property were subject to a captive reinsurance arrangement and also agreed to pay a penalty of $5.6 million.
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