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Fidelity
National Financial has settled Colorado's investigation of alleged
title insurance-related kickbacks, agreeing to pay about $1.2 million to
consumers nationwide, Colorado's Insurance Commission reported.
In the settlement
agreement, Fidelity, which already terminated its captive reinsurance
treaties as part of the probe, agreed to refund about $1.2 million to consumers
in approximately 18 states, without admitting wrongdoing.
The company also agreed to continue to refrain from such
captive insurance arrangements and not enter into new ones, unless it can get a
court order saying the arrangements are legal.
The Colorado investigation of nine title insurers, including
Fidelity, led to the earlier refunding of about $24 million to
consumers by First American Title Insurance Co., and sparked dozens of similar
investigations nationwide in states including Florida, Washington, California,
Oklahoma, Minnesota and Washington.
The companies are accused of phony reinsurance contracts
between title companies and subsidiaries of real estate agents, developers and
lenders.
Under these alleged elaborate schemes, the title insurers
agreed to give about half of the premium on title insurance policies to captive
reinsurance companies created by the other conspirators. The parent companies
of those captives would in turn refer business to the title insurer. The
alleged arrangements harm consumers by potentially forcing up title insurance
rates.
Last Wednesday, the
Arizona Department of Insurance said Fidelity National Title Insurance Group
had agreed to refund
more than $600,000 to nearly 4,000 title insurance policyholders in Arizona as
a result of a multistate settlement.
In July, Fidelity reached
a settlement with the California Department of Insurance following the
agency's investigation into captive reinsurance practices. While admitting no
wrongdoing, Fidelity agreed to refund approximately $7.7 million to those
consumers whose California property were subject to a captive reinsurance
arrangement and also agreed to pay a penalty of $5.6 million.
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