Title Insurance

Recent investigations by the states have revealed that there is a lack of competition for title insurance and that some title insurers and other groups engaged in the settlement business have committed fraud. The fraud has occurred through blatant conflict of interest, kickbacks to realtors, lenders, and homebuilders, and by setting up a captive reinsurance arrangement as a means of transferring premiums to various groups in exchange for referrals. The NAIC and state insurance departments, working with state Attorneys General, have investigated the title insurance business and prosecuted several title insurers for this practice. The states have reached settlements totaling nearly $50 million with title insurance entities found to have violated state and federal law prohibiting kickbacks.