For Release: July 18, 2007
Media Calls Only: 916-492-3566
Insurance Commissioner Steve Poizner Orders Stewart Title and E-Title to Pay $1.5 Million to Settle Charges that the Firms Used Illegal Methods to Generate More Business
SACRAMENTO - Insurance Commissioner Steve Poizner today announced a settlement with Stewart Title Guaranty Company (Stewart Title) and Electronic Closing Services, Inc. (E-Title), that requires the firms to jointly pay $1.5 million and immediately cease aiding and abetting unlicensed firms conducting business illegally in the State of California.
"Today's settlement is a victory for California," said Commissioner Poizner. "Punishing unlawful insurance practices in California helps level the playing field for businesses that play fair and follow the law. I will continue to crack down on those who act illegally and leave consumers exposed to potential losses."
The settlement follows a California Department of Insurance (CDI) investigation into Stewart Title, E-Title and Richmond Title Services. The investigation revealed that between March 2005 and January 31, 2007, Richmond Title Services repeatedly violated California's insurance code by operating as an underwritten title company without holding a license from the California Insurance Commissioner. Richmond Title is not a signatory to this settlement agreement. The California Department of Insurance continues to pursue legal action against Richmond Title Services in this matter.
In March, Commissioner Poizner issued a Cease and Desist order against Richmond Title Services. The Order named Stewart Title Guaranty Company, a Texas Corporation and Electronic Closing Services, Inc., d.b.a. E-Title, a Delaware Company, for aiding and abetting Richmond Title Services, L.P. According to CDI, on December 20, 2004, Richmond Title Services entered into a title work charge agreement with Electronic Closing Services. Through the agreement, Richmond Title prepared title searches, title examinations, title reports, and/or certificates of abstracts of title on behalf of E-Title and Stewart Title.
Based upon the performance of those services, E-Title, as an agent for Stewart Title, agreed to issue Title Policies in California, Colorado, Nevada and Pennsylvania, on behalf of Stewart Title. In payment for those services, E-Title and Stewart Title agreed to pay $709.90 per order, as well as 100 percent of the search revenue to Richmond Title. The title work charge agreement was then amended in March 2005 to expand the issuance of title policies to Kansas, Maine, Missouri, Montana, Nebraska, New Hampshire, New Jersey, North Carolina, Rhode Island, Vermont, Virginia, Washington D.C., West Virginia and Wisconsin. The amendment also lowered the payment to Richmond to $519.45 per order.
Between March 2005 and January 31, 2007, Richmond Title illegally prepared more than 2,173 title searches, examinations, reports and/or certificates or abstracts of title on California properties on behalf of E-Title and Stewart Title.
The CDI urges all consumers to visit the Department's Web site at www.insurance.ca.gov or contact the Consumer Hotline at 800.927.HELP to verify the license of a company or agent/broker before entering into an insurance transaction.
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