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For Immediate Release NAIC ADDRESSES
CONGRESS ON Testimony Highlights Regulators' Efforts To Uncover Illegal Kickbacks
WASHINGTON, D.C. - (April 26, 2006) - Speaking today on behalf of the National Association of Insurance Commissioners, (NAIC) Colorado Deputy Insurance Commissioner Erin Toll told a key U.S. House panel about efforts by state insurance officials to uncover and address pervasive kickback schemes within the title insurance industry.
"State insurance officials are working aggressively to uncover and prevent improper business practices by title insurers and agents," said Toll to the U.S. House Financial Services Subcommittee on Housing and Community Opportunity. "We have imposed penalties, ordered restitution, and shut down sham business arrangements."
Title insurance is a necessary and unique insurance product that protects home buyers and lenders from problems that may arise with a real estate title, but also presents many sensitive consumer protection issues. Colorado and other states have investigated various schemes to provide illegal kickbacks to settlement providers. These investigations have led to numerous actions, including two Colorado-led multi-state settlements to provide wronged consumers $25.3 million in restitution. Settlements negotiated by all states total nearly $50 million so far.
"Our investigations show a black market has been created where good actors can't complete with bad ones," continued Toll, who also co-chairs the NAIC Title Insurance Issues Working Group. "The states have initiated an exhaustive process to level the playing field and to ensure a free and healthy competitive market."
Toll also shared various solutions that states are exploring to address market problems. She called attention to legislation passed by the Colorado General Assembly that goes beyond current federal housing laws to provide tougher penalties for wrongdoers and restitution for harmed consumers. She also suggested improved cooperation between and among state and federal regulators.
To view the entire testimony, you can visit the NAIC Web site: Testimony Before the House Subcommittee on Housing and
Community Opportunity regarding State Insurance Regulators' Investigations
of the Title Insurance Industry
About the NAIC About the NAIC Headquartered in Kansas City, Missouri, the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and the five U.S. territories. The NAIC’s overriding objective is to assist state insurance regulators in protecting consumers and helping maintain the financial stability of the insurance industry by offering financial, actuarial, legal, computer, research, market conduct and economic expertise. Formed in 1871, the NAIC is the oldest association of state officials. For more than 135 years, state-based insurance supervision has served the needs of consumers, industry and the business of insurance at-large by ensuring hands-on, frontline protection for consumers, while providing insurers the uniform platforms and coordinated systems they need to compete effectively in an ever-changing marketplace. For more information, visit NAIC on the Web at: http://www.naic.org/press_home.htm
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