Claiming title insurance companies have been landing business by illegally wining and dining real estate agents, bankers and lenders, Washington state officials are laying the groundwork for increased regulation of the industry.

Washington State Insurance Commissioner Mike Kreidler issued a report this week on an 18-month investigation of a dozen title companies in King, Snohomish and Pierce counties.

Kreidler said the investigation found “all the major players in the greater Seattle title insurance market were routinely breaking state laws that limit and restrict the use of incentives and giveaways to steer business.”

Washington state law limits the use of incentives and inducements to $25 per person per year. Investigators found that many of the companies exceeded those limits by thousands of dollars on a regular basis.

One company spent $11,000 on tickets and expenses at two Seattle Sonics basketball games, investigators said. One agent spent $6,000 for cocktails during the 18-month period under investigation, and another company picked up a single restaurant tab for more than $3,300.

In a statement, Kreidler said he ordered the Washington investigation in 2005 after his office wrapped up its participation in a multistate, national probe into marketing abuses in a Colorado-based title insurance scheme.

In Washington, investigators alleged that all 11 companies examined were found to have violated state law governing incentives and inducements. The companies were Chicago Title Insurance Co., Commonwealth Land Title Insurance Co, Commonwealth Land Title of Puget Sound, Transnation Title Insurance Co., Fidelity National Title Co. of Washington, First American Title Insurance Co., Old Republic Title Ltd., Pacific Northwest Title Co. of Washington, Rainier Title Co., Stewart Title Co. of Seattle and Ticor Title Co. of Washington.

The report singled out First American as the worst offender, averaging more than $120,000 a month in incentives and giveaways.

Thomas Hartman, First American’s Northwest regional vice president, told the Seattle Post-Intelligencer that the company has been seeking “clarity and uniform enforcement of the rules within our industry” for several years. “While we dispute some of the individual findings, we welcome the clarity this report provides, and we are in complete agreement with the suggested recommendations.”

Kreidler told the Seattle Times he will not seek sanctions against title insurers because the conduct was so pervasive he sees no fair way to prosecute it.

But the state will convene a panel that will look at revamping regulations governing the title insurance industry or instituting a state-run system like Iowa’s in the interest of protecting consumers from overcharging.

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