Spitzer Probing Whether Title Insurers Paid Illegal Rebates
March 3, 2006
New York Atty. Gen. Eliot Spitzer is investigating whether title insurers such as Fidelity National Financial Inc. paid improper rebates, allegations similar to those settled in California last year.
He also issued subpoenas seeking information on agent compensation, LandAmerica Financial Group Inc. said in a November filing. New York regulators are in the late stages of their probe and may bring civil charges, the Wall Street Journal said Thursday, citing people familiar with the investigation.
"New York regulators have been reviewing aspects of the title insurance business for more than a year," Spitzer spokesman Marc Violette said. He declined to elaborate.
The probe comes in the wake of a July settlement in California by three title insurers: Richmond, Va.-based LandAmerica; Fidelity National of Jacksonville, Fla., and First American Corp. of Santa Ana. The companies agreed to pay $37.8 million to resolve allegations that they drove up costs to customers by paying kickbacks for referrals.
U.S. title insurers had net income of $1.1 billion in 2004, according to a report by credit-rating firm A.M. Best Co. and the American Land Title Assn. Annual industrywide revenue more than tripled in the last decade to $16.4 billion, the report said, amid record demand for new homes in the last five years.
"They are seeking information and we are responding," LandAmerica spokeswoman Lloyd Osgood said. Fidelity National has been cooperating with many states, including New York, Senior Vice President Daniel Murphy said. First American didn't return a call.
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