A California title company has been hit with an accusation from the state seeking $14 million in civil penalties for alleged kickbacks.
Orange Coast Title Co. allegedly engaged in illegal rebate activities, unfair methods of competition and “deceptive acts or practices in the sale of title insurance,” according to California Insurance Commissioner John Garamendi.
The company is accused of committing 2,442 violations of the insurance code, according to Garamendi’s office.
“We are very surprised by this filing,” John L. Marconi, president of Orange Coast Title Family of Cos., said in a statement today. In the intervening years, “we have not heard anything from the DOI concerning results of their audit or any alleged violations,” he said, “and we are disappointed this has occurred.” He added that the company is taking the allegations seriously and will be investigating the accusations.
The department launched an investigation of the company in 2000 after receiving “numerous complaints” about the company’s actions, according to Garamendi.
The title insurance industry came under an intense spotlight in 2005. Colorado’s Insurance Division in February 2005 investigated nine Colorado title insurers for alleged kickback schemes said to result in overcharges to consumers. The probe sparked dozens of investigations nationwide, in Florida, Washington, Hawaii, California, Oklahoma, Minnesota and Washington and other states.
Fidelity National Financial and First American Title Insurance Co. last November agreed to pay a total of $22.7 million to consumers in final settlement agreements with California’s insurance commissioner over alleged rebate activities that violate the Real Estate Settlement Procedures Act and some state laws.
The insurance commissioner said illegal rebates in the title insurance industry “cost policyholders more by snuffing out competition and inflating premiums.”
Santa Ana, Calif.-based Orange Coast Title sales representatives allegedly submitted receipts, invoices, and expense reports for reimbursement of the purchase of numerous items totaling more than $241,000, according to Garamendi.
Items included gifts and gift certificates, spa treatments, tickets to movies and golf courses, televisions, DVD players, wedding gifts and lingerie, trips, and entertainment and catering expenses, Garamendi alleged.
Orange Coast Title claims to be among the largest independently owned underwritten title companies in the United States, with some 1,500 employees in 105 offices in California, Utah, Arizona, Colorado, Nevada and Texas.
Orange Coast Title’s family of companies includes California Title Company and Advantage Title Inc. throughout Southern California, California Title of Northern California in Northern California, Equity Title Insurance Agency, LLC in Utah, Equity Title Agency in Arizona, Equity Title of Colorado in Colorado, First Centennial Title Company in Reno and Equity Title of Nevada in the Las Vegas area.
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