Investors Title Company Fined for Illegal Rebate Activities

August 29, 2005

Calfornia Insurance Commissioner John Garamendi has ordered Investors Title Company agreed to end illegal rebating activities and pay a $1 million fine. The settlement was reached following a six-month California Department of Insurance (CDI) investigation into accusations that the company was steering title business by using illegal rebate activities. The investigation, based on employee interviews and an examination of the company’s books and records, found that Investors Title Company had used illegal rebate activities which included fabricating fraudulent receipts totaling over $108,000. The company also paid more than $145,000 for printing, postage, promotional materials, and other business support services for the benefit of realtors, builders, and lenders, totaling over $253,000 in illegal distributions.

“Illegal rebates add unwarranted costs to title business operations and artificially inflate the cost of premiums for policyholders,” said Insurance Commissioner John Garamendi. “Our department will continue to investigate these illegal rebate scams which foster unfair competition and cheat consumers.”

According to Garamendi, the $1 million fine equals four times the amount of claimed illegal rebates. Additionally, the settlement suspends the employees involved in the illegal rebate activities for 10 days.

In addition to the fine, Investors Title, which transacted title business in the counties of Los Angeles, Ventura, Orange, Riverside, San Bernardino, and San Diego also was ordered to pay a $5,000 penalty for failure to comply with a previous Order of the Commissioner to cease and desist, and to reimburse $52,974 to the Department of Insurance for costs of the investigation.

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