News: 2009 Press Release

Insurance Commissioner Steve Poizner announced today that the Department of Insurance has reached an agreement with Lizett Alcaraz and her employer Commerce Title Company to resolve allegations of illegal rebating activities. These enforcement actions are the first to be brought under a new law that makes title marketing representatives as well as title companies liable for violations of the anti-rebate laws.  

"Whether it's free tickets to sporting events or concert tickets or in this case free listings of potential business leads, consumers are the ones who end up paying when illegal rebates drive up costs," said Commissioner Poizner. "This new authority is a vital tool to help curb marketing abuses in the industry. I will continue to take action to ensure fair title insurance pricing for consumers in California."

Under the settlement, Alcaraz agreed to pay a personal penalty of $1,570 and suspension of her certificate of registration for 30 days. She will not be able to market and sell title insurance during that time. Separately, Commerce Title Company, an underwritten title company licensed to transact title insurance in thirty-seven counties in California, agreed to pay $21,600 in penalties and $2,500 to CDI for the reimbursement of attorney fees and costs.  

In February 2009, CDI began investigating and examining the marketing practices of Alcaraz and her employer Commerce Title Company after receiving written complaints alleging illegal rebating activities. The Department investigated marketing activities in Commerce Title's Corona, California office in Riverside County since January 1, 2009. Based on results of the investigation, CDI alleged that Alcaraz provided marketing lead lists, amounting to $1,570 in business support expenses, to various realtors and lenders. CDI alleged that Commerce Title provided marketing lead lists, amounting to $10,800 of business support expenses, to various realtors and lenders as an inducement for the referral and placement of title business. These lists included notice of default lists, reverse mortgage lead lists, lists of adjustable loans coming due with phone numbers of borrowers, REO lead lists, and farm lead lists with mortgage information on real estate properties.  

Prior to the new legislation (SB 133) sponsored by the California Land Title Association, the Department of Insurance had no enforcement authority over the individual title marketing representatives who engaged in illegal rebating activities.  While the practices were illegal, the Department only had recourse against the title insurers. Under the new law, effective January 1, 2009, the Department is authorized to bring administrative actions against individual title marketing representatives along with title insurers who engage in illegal practices to refer title business.  

The new law establishes a zero tolerance policy for enticing realtors and lenders with food or beverage or entertainment as an inducement to refer title business.  Additionally, it provides the Department with regulatory oversight of title marketing representatives by establishing a certification program and disciplinary action including the imposition of a monetary penalty to be paid out of personal funds and suspension of the certificate of registration. A title marketing representative must hold a valid certificate of registration from CDI to act in that capacity. To date, CDI has issued 1,913 certificates of registration to title marketing representatives.

Commissioner Poizner advises consumers that they have a choice when it comes to which title company to use. Prices can vary and consumers can compare rates on nearly 100 title insurance companies in California via a Web site like http://www.clta.titlewizard.com/, which utilizes a software-generated system to deliver up-to-date title rates. Sellers, home buyers, and homeowners looking to refinance their homes will be able to search by zip code and other factors to find the most competitive provider in their area.