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CFO SINK ANNOUNCES $5 MILLION TITLE INSURANCE SETTLEMENT
Florida Chief Financial Officer Alex Sink announced that First American
Title Insurance Company (First American) has agreed to pay $5 million in
penalties and costs after allegedly paying “kickbacks” to builders, bankers,
real estate agents and brokers for the referral of business in violation of
the Florida Insurance Code and federal law.
“I’m proud of the hard work of our title insurance investigators and
lawyers, which resulted in this settlement,” said CFO Sink, who oversees
DFS. “We will not tolerate anyone who violates insurance laws designed to
protect the public in order to gain an unfair advantage over their
competitors.” CONTINUEDFollowing a year-long investigation by the Department of Financial Services
(DFS), both the U.S. Department of House and Urban Development (HUD) and the
Florida Office of Insurance Regulation (OIR) were invited to join DFS in
obtaining sanctions against First American. The three regulatory agencies
reached an agreement with First American this week after concluding
settlement negotiations.
First American Title Insurance Settlement Agreement
The investigation looked into whether First American had created and
utilized limited partnership entities to act as sham title insurance
agencies as a means of funneling prohibited payments for the referral of
business. The entities enlisted real estate agents, mortgage brokers, banks
and homebuilders who referred business to First American's sham title
insurance agencies, resulting in unfair financial gains to First American
and its affiliated title insurance agencies.
Under terms of the agreement, First American is required to sever its
business relationships with 87 of its limited partnership title insurance
agencies in Florida, and to conduct future business activities under strict
requirements subject to review of a monitor who will report inspection
results on a monthly basis for a period of one year.
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