News: 2009 Press Release
For Release: March 30, 2009
Media Calls Only: 916-492-3566
Insurance Commissioner Poizner Announces $365,000 Settlement with Fidelity for Alleged Illegal Rebating Activities
Insurance Commissioner Poizner announced today that the Department of Insurance has reached an agreement with Fidelity National Title Company to resolve allegations of the company's illegal rebating activities from 2000 to 2002. Fidelity agreed to pay $345,000 in penalties and $20,000 to CDI for the reimbursement of attorney fees and costs.
In September 2002, CDI began investigating and examining the operations of Fidelityafter receiving written complaints alleging illegal rebating activities. The Department investigated marketing activities in Fidelity's Orange County office between April 2000 and August 2002. Based on results of the investigation,the Department alleged that Fidelity provided printing, miscellaneous gifts, travel and entertainment, amounting to $345,000, to various realtors and lenders as an inducement for the referral of title insurance business.
"When referrals by realtors, lenders orhomebuilders are driven by kickbacks from title insurers, the consumer's best interests are compromised," said Commissioner Poizner. "I have been pleased to see that since these activities occurred, Fidelity has brought the questionable practices to a halt and has been instrumental in supporting new legislation to curb illegal rebates."
Under the new legislation (SB 133), sponsored by the California Land Title Association, effective January 1, 2009, the Department may bring administrative actions not just against a title insurer but also against individual title marketing and sales representatives who engage in illegal rebate practices.
"This is an important tool to stop unfair practices in the industry," continued Commissioner Poizner. "I will continue to take action to ensure fair title insurance pricing for California consumers."
The stipulation and order are attached.
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