Calif. Title Insurers to Pay $3.5M for Alleged Unfair Rating Practices
Commissioner Poizner Announces $3.5 Million Settlement with LandAmerica Corporation, $2 Million Refunded to Customers
Commonwealth Land Title, Lawyers Title, and Transnation Title agree to Cease and Desist from unfair rating practices
Three California title insurance companies have been ordered to pay a $3.5 million settlement in penalities and refunds to consumers for allegedly engaging in unfair practices in their rating and underwriting.
Insurance Commissioner Steve Poizner announced today that the Department of Insurance (CDI) has reached an agreement with Commonwealth Land Title Insurance Company, Lawyers Title Insurance Corporation, and Transnation Title Insurance Company, principal title underwriters of parent company LandAmerica Financial Corporation Group Inc. (LandAmerica), a Virginia corporation. Through the settlement, LandAmerica has agreed to halt unfair practices in their rating and underwriting, including failure to follow their own rates, resulting in premium overcharges for many consumers purchasing residential title insurance policies.
“Insurance companies that overcharge consumers will not get away with it under my watch,” said Commissioner Poizner. “My department aggressively investigates companies that practice business unfairly, and we will not stop until consumers are receiving the best service possible — including rates and discounts that they are entitled to. This settlement is a $2 million victory for consumers, and a warning to insurers who refuse to play by the rules.”
LandAmerica Corporation companies were accused of failing to comply with rates set by the companies, incorrectly rating policies, and failing to apply applicable discounts, which resulted in overcharges to consumers. This accusation was filed as a result of findings in a CDI market conduct examination covering the period between Jan. 1, 2005, and March 31, 2005.
Under the settlement, LandAmerica Corp. agreed to cease and desist from unfair practices, and to pay up to $3.5 million in penalties and refunds. Of that total, $1.5 million is a monetary penalty.
LandAmerica will issue refunds to identified overcharged consumers who purchased a residential loan title loan policy issued by the LandAmerica title companies, for up to $2 million total. LandAmerica will report to CDI their progress in issuing refunds, so that CDI can closely monitor the company’s timely payments to consumers.
If a consumer would like to check his or her individual eligibility for a refund, they should contact LandAmerica Financial Group, Inc. at 1-800-446-7086. If a consumer has any additional questions or concerns about insurance, they should call the CDI Consumer Hotline at 1-800-927-HELP.
Copy of cease and desist order visit: http://www.insurance.ca.gov/0400-news/0100-press-releases/0070-2008/upload/DOCS_LEGAL_430190_v1_LANDAMERICA_STIPULATION_AND_ORDER_2_1_16_08.pdf
Source: CDI