Arizona Insurance

LOS ANGELES - Two prominent insurance companies related to Arizona here on the test Monday as the CA was the last state to split on the title insurance.

The regulatory authorities are calling the practice amounts to bribes to the prime contractors, brokers and mortgage companies in return for securities management Business-to-unnecessarily to the costs of insurers and owners hundreds of dollars each time they buy a house or refinancing.

The Insurance Commissioner John Garamendi of California has spent 4 ½ hours Monday investigation country America Financial Group Inc. and Fidelity National Financial Inc. executives. The consultation was followed by a subdivision of $ 24 million in March between the regulatory authorities of Colorado and First American Title Insurance Co. title insurance commissions with the house-owners. Arizona first U.S. is the largest advertising

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The Arizona Insurance Department, addressed to Deputy Director Gerrie Marks until Monday the hearing in downtown Los Angeles, has a low-profile approach, in which Garamendi called a schema. Arizona plans to have private meetings in the coming weeks, several securities of three companies.

“If it’s going on in California, it is likely happening in Arizona,” said Marks.

Marks said, most consumers are not compare prices with the title insurance. Many will only with a company, it was recommended by the manufacturer or his estate agent. Title insurance officials say consumers often save time.

The lenders require the title, protection of the original purchaser and lenders against losses if someone successfully challenges the validity of a claim of title or mortgage, a seller in a Real Estate Deal.

The market regulators from California, said the title of the company would contribute to these partnerships, to ensure that owners and other businesses send his way permanently. The two companies, they put an end to the practice earlier this year by concerns of insurance regulators.

Garamendi and others of his staff said securities and insurance companies could lower rates, large premium reductions among its partners, construction workers or mortgage. He said when he finds that laws were broken, it will seek refunds.

The reinsurance programs began in the late 1990, as securities and insurance companies would be partners with the home owners, mortgage companies and real estate broker “captive reinsurance.” After title insurance company adopted a fee, there would be nearly half the premiums for its partners.

The question is whether reinsurance companies provided risk really was. In Colorado, regulatory authorities, said the small number of companies, if any, claims, and that the payments amounted to bribes in return for the operation. The amounts paid for damage are relatively low in comparison with the premiums.

Fidelity America countries and leaders said they had some reinsurance programs in Arizona, but the amount of money involved was relatively low.

Jacksonville, Fla.-Fidelity, for example, Arizona related to the number of 626000 $ 1999 to 2004. And $ 387000 which was mainly based in California, William Lyon Homes Inc Scottsdale-based Meritage Homes. Less than $ 150000 was awarded to mortgage banks and $ 90000 was awarded to real estate agents.

Richmond, Va.-based American countries does not exceed the figures for financing Arizona.

“Since 1999 we have $ 10.5 million captive reinsurance the USA, and $ 7.7 million in California. We also have $ 16 billion title insurance,” said Peter A. Kolbe, Senior Vice President and Chief Counsel for Fidelity regulations. “These (reinsurance) is a part of the minute of these cases.”

But the problem, according to the regulatory authorities in Colorado and California, is that while the amount may be small for insurance companies, she adds possibly up to an amount of money for consumers.

In California, the cost for insurance securities $ 350000 for a house is about $ 1400, after Garamendi’s Office. In a reinsurance relationship, the title insurance company will take a general rule, a service of $ 350, then divide $ 1050 Premium with partner countries.

With a loss ratio of 6 per cent, confirmed by the titles of insurance companies, the expected loss is only $ 84 However, the title insurance have indicated that they also have high fixed costs.

“The risk is not related to prices. So the question is, can they lower rates?” Garamendi said in an interview. “If these artificially high prices? They are assignor 50 per cent (the premium). It shows there is a quantity of fat in this game.”

Fidelity America and the country, said, California consumers do not pay extra money because the securities are insurance rates after public statements of the division of insurance.