American Land Title Association
Home  >  News Room
News Room


SoftPro is the nation's leading provider of Real Estate Closing and Title Insurance software


North American Title Insurance Company is a seasoned title insurance underwriter that has been helping customers achieve the American dream of homeownership for more than 50 years. In the past several years, we have become known as the “underwriter next door,� because our associates are always easy to reach and our processes are, at all times, quick and straightforward. Our agency application process is fast and transparent for qualified agents. NATIC offers a one-hour underwriting response guarantee that is unparallelled in our industry. In addition, we value our agents based on their title industry knowledge and experience, not just on profits alone.


Title insurance execs testify at California hearing

April 5, 2005

LandAmerica, Fidelity appear before insurance commissioner

By Janis Mara
Inman News

The two largest title insurers in California testified before the state's insurance commissioner Monday in a probe of alleged kickback arrangements.

LandAmerica and Fidelity National, two title insurers that write roughly 60 percent of all the title insurance in California, testified in a daylong investigatory hearing headed by Insurance Commissioner John Garamendi in Los Angeles.

First American Title, which has cooperated with investigators, controls about 30 percent of the California market. Its executives were not compelled to testify at the hearing.

"Nothing less than the American Dream is at stake here," Garamendi said at the hearing. "For most of us, home ownership is the key to our financial security. Increasing the middleman costs of home acquisition exacts a toll on home ownership."

"The average premium on a title policy is over $1,400. It is an expense you cannot avoid," Garamendi noted, saying that the burden has the potential to stifle the market and drive out consumers.

The hearing included a panel of witnesses from LandAmerica and several producers with captive-reinsurance arrangements with LandAmerica companies. Following that panel, the hearing involved testimony from a panel of witnesses from Fidelity and several producers having captive arrangements with Fidelity.

Other companies subpoenaed in the overall investigation include William Lyon Homes, KB Home, RE/MAX, United Home Mortgage Corp., Shea Financial Services and Wells Fargo Home Mortgage.

The Commissioner, co-chair of the Title Insurance Working Group within the National Association of Insurance Commissioners, has been working with Colorado and Washington state insurance regulators to probe a series of alleged 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 arrangements were designed to kick back a large share of the title-insurance premium in exchange for the referral of the customer to the title company, a violation of the law, and a practice that harms consumers by potentially forcing up title insurance rates, according to Garamendi.

Garamendi said the hearing would give insurers and producers an opportunity to demonstrate that the arrangements are "not what they appear to be," and that the arrangement really is reinsurance, that they are receiving a real benefit from the arrangements, and that the amount they are paying is reasonable for the benefit received.

Copyright 2005 Inman News



Print Friendly


How To Find Us:
American Land Title Association
1800 M Street, NW, Suite 300S
Washington, D.C. 20036-5828
P. 202.296.3671 F. 202.223.5843
www.alta.org
service@alta.org
Copyright © 2004-2015 American Land Title Association. All rights reserved.
SecurityMetrics for PCI Compliance, QSA, IDS, Penetration Testing, Forensics, and Vulnerability Assessment