California Commissioner Announces Finalization of Settlement Agreements

November 2, 2005

Insurance Commissioner John Garamendi has announced that agreements have been reached with two of the nation’s largest title insurers over illegal rebate activities. The deals will deliver $22.7 million to consumers affected by the illegal actions, and require the companies to cooperate with the Department of Insurance on reform of the title industry.

Fidelity National Financial Inc. and First American Title Insurance Co. were accused of setting up captive reinsurance companies to funnel illegal rebates to banks, builders and realtors to steer business back to the title companies. Earlier this year, the companies, along with LandAmerica Financial Corporation, reached agreement in principle to resolve accusations from the Department.The LandAmerica agreement has not been finalized.

“The illegal actions of these companies revealed not only that title insurance rates are bloated, but they damaged the trust that is an essential part of our insurance system,” said Commissioner Garamendi. “These agreements and penalties, totaling $33.3 million, should send a strong message that illegal rebating will not be tolerated in California.”

Fidelity will reimburse consumers $7.7 million within 120 days; pay monetary penalties of $5,425,000; and pay $175,000 to reimburse CDI for the cost of its investigation.First American has already reimbursed consumers $15 million.It will pay monetary penalties of $4,825,000 and $175,000 in reimbursement costs to CDI.

Both companies have agreed to stop captive reinsurance business arrangements; to cooperate with CDI to identify and file for appropriate rate reductions; to cooperate with CDI to improve consumer awareness of title insurance rates; and agreed to work with CDI to prevent illegal rebate activities. Consumers who may have been impacted by the illegal rebating activity can contact First American at 800-854-3643, or visit its web site at Fidelity can be reached at 800-694-9787, or

For further information, call Department’s Hotline at 800-927-HELP.

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