Title Company Fined over Free Marketing for Real Estate Agents

A California title company has agreed to pay $150,000 to the California Department of Insurance (CDI) to resolve alleged violations of California’s insurance anti-inducement law by two of its registered title marketing representatives, who allegedly provided free photo and video services to real estate agents, along with weekly marketing tips.  According to CDI, one of the Company’s representatives produced at least 164 videos, some of which featured aerial drone footage and real estate agents promoting their listings resulting in 37 orders for title insurance.

CDI alleged that this conduct violated California Insurance Code § 12404(a), which prohibits a title insurer or title marketing representative, among others, from paying, directly, or indirectly, any commission, compensation, or other consideration to any person as an inducement for the placement or referral of title business.  CDI takes the position that it is a per se violation of the anti-inducement law to furnish all or part of an employee’s time or productive effort to any person for any service unrelated to the title business.

The title company denied the allegations but agreed to pay the penalty and implement a formal employee training program on state and federal anti-inducement laws. The title marketing representatives were also disciplined in separate orders.