Industry News

Colorado cracks down on title insurers

Kickback penalties, entrance exam toughened

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The state of Colorado is cracking down on title insurance agencies, passing legislation with heavier penalties for wrongdoing, setting new capitalization standards for agencies and toughening up the agents' licensing exam. "Probably the most important part of H.B. 1141 is that it allows the Insurance Commission to demand restitution to aggrieved parties in the amount of kickbacks," said Erin Toll, Colorado's deputy insurance commissioner, referring to the new legislation that goes into effect July 1. The title insurance industry came under an intense spotlight in 2005, largely because of Toll's efforts. Colorado's Insurance Division has investigated nine Colorado title insurers for alleged kickback schemes said to result in overcharges to consumers. Toll's probe focused on affiliated business arrangements, or ABAs, that allegedly existed only to secretly funnel kickbacks between title insurance agencies, builders and lenders. Affiliated business partnerships in real estate are legal, ...