In the Matter of the Certificate of Authority of: Stewart Title Guaranty Company
Published: Oct. 6, 2007 | Result Date: Aug. 29, 2007 | Filing Date: Jan. 1, 1900 |Case number: DISP05048942 Settlement – $1,000,400
Court
Insurance Commissioner of the State of California
Attorneys
Plaintiff
Respondent
Joshua E. Anderson
(Sidley Austin LLP)
Facts
The California Department of Insurance alleged that Stewart Title Guaranty Company, the fourth biggest U.S. title insurer, paid $500,196 in illegal kickbacks to various builders, lenders, and title agents in exchange for title insurance referrals. Payments were in the form of illegal rebates which constituted a captive reinsurance scheme in which the title insurer made payments that were camouflaged as "reinsurance premium" for the referral of business.
The illegal rebate scheme involved 3,908 California homeowners who purchased or refinanced a home between 1998 to 2006. Stewart Title Guaranty Company controls approximately ten percent of the California title insurance market.
Result
Prior to an administrative hearing, Stewart Title Guaranty Company agreed to a financial settlement and to accept a cease and desist order. Stewart Title Guaranty Company paid the California Insurance Department $1,000,400 but did not acknowledge any wrongdoing.
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