First American to pay Florida $5M

Tuesday, November 20th, 2007

First American Title Insurance Co. has agreed to pay $5 million in penalties and costs for alleged kickback payments to builders, bankers, real estate agents and brokers for business referrals, violating the Florida Insurance Code and federal law, state officials said.
A yearlong investigation by the state Department of Financial Services found that 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, the state said.
Under terms of the agreement, First American must end its business relationships with 87 of its limited partnership title insurance agencies in Florida, and conduct future business activities under strict requirements subject to review of a monitor who will report inspection results on a monthly basis for a year.
After the investigation, both the U.S. Department of Housing and Urban Development and the Florida Office of Insurance Regulation were asked 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.

Source: Jacksonville Business Journal

 

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