Opinion ID: 1036249
Heading Depth: 2
Heading Rank: 3

Heading: Ill Inducement Violations and OIC Enforcement

Text: In 2005, OIC launched an investigation into the marketing practices of several major title insurers operating in Washington. Over the 10-month investigation, OIC found that violations of former RCW 48.30.140 (1994) and former 48.30.150 were widespread and pervasive and that the entire industry was rife with practices gone haywire. . . . [T]he consumer, who ultimately pays for the coverage, is the only source of money for these illegal expenses. AR at 473-E. OIC further found that some of the major offenders view the law as little more than a nuisance standing between them and their ability to have business steered to them from their middlemen, go-betweens and associates in the real estate business. AR at 473-L. CTIC was no exception. Over a period of 18 months, CTIC co-advertised with middlemen (a cost of $100 to $4,300) over 150 times. CTIC bought food for hundreds of middlemen meetings and broker opens, sponsored golf tournaments (over $3,000), hosted receptions and hospitality suites ($13,000), and, on one occasion, purchased 26 seats ($2,400) at a Seahawks game. These unlawful 6 No. 87215-5 expenditures were not atypical, but rather CTIC's violations were somewhere in the middle of the pack when [CTIC]'s violation record is compared to other companies. AR at 473-H. OIC did not act on the violations it found at that time, but published its findings in a written report, AR at 473-A through 473-N. In November 2006, OIC issued a technical assistance advisory to all Washington title insurers and title insurance agents, intended to clarify requirements [of the anti-inducement laws] for title insurers and their agents. AR at 473AF. In 2007, OIC began investigating Land Title. For purposes of the motion now on review, CTIC has stipulated that Land Title violated the anti-inducement statutes through 'wining and dining' of real estate agents, builders, and mortgage lenders with meals, golf tournaments, advertising for one real estate agent; purchases at a Board of Realtors auction; and professional football championship game tickets, in amounts over the $25.00 limit allowed by [former] WAC 284-30-800. AR at 279. In November 2007, the OIC approached CTIC with a Consent Order Levying Fine, which provided for CTIC to (1) stipulate that Land Title's conduct violated the Inducement Regulation, (2) agree to pay a fine of $114,500 based on Land Title's alleged violations, and (3) enter into a Compliance Plan that required specific tracking of expenditures, semi-annual internal audits and related reporting and corrective actions and to represent that Chicago title[sic] has the authority to comply fully with the terms and conditions of the [Compliance] Plan. AR at 514. CTIC refused to sign the consent order.