OLYMPIA, WA - Citing a “blatant disregard of the law,” Washington State’s insurance commissioner, Mike Kreidler, has issued a notice of hearing to Stewart Title, seeking $1.95 million for its alleged violations of the insurance law. Kreidler stated that the alleged violations were discovered during an investigation this summer and total thousands of dollars in illegal inducements paid to real estate agents, brokers, and agencies.
“I drew a hard line of zero tolerance after the widespread and pervasive abuses of the law we uncovered in last fall’s investigation of the title insurance industry. It should be no surprise to anyone that I am seeking the highest financial penalties under my authority against Stewart Title.”
According to Kreidler, state law prohibits title insurers from giving anything in excess of $25 per person, in any 12-month period, as an inducement or reward in connection with the placement of title insurance business.
Kreidler was appalled at the number and severity of violations found during the review of Stewart Title of Snohomish County, Inc.’s records. He issued a cease and desist order Aug. 6 demanding the insurer stop lavishing gifts and incentives in an effort to obtain business referrals.
“Stewart Title appears to have made no effort to comply with the law on illegal incentives and inducements. I’m shocked that they thought they could get away with it,” said Kreidler.
According to Kreidler’s office Stewart Title has been accused of violating the state law 195 times over a four month time frame this summer. Each violation carries a fine of $10,000 per occurrence.
Among the violations:
- Advertising costs for real estate agents, brokers and agencies
- “Desk fees” (These hefty monthly payments to real estate agencies, some exceeding $1,000, are paid ostensibly for renting desk space, that often sits vacant.)
- Real estate agency golf tournament sponsorship
- Banquet and refreshments expenses
- Auction donations
- Gifts
