Insurer ordered to repay Hoosiers
The Indiana Department of Insurance has ordered First American Title Insurance Co. to repay more than $3 million to Hoosiers it overcharged for title insurance from 2006 to 2008.
State insurance regulators discovered the overcharges by the Nebraska-based insurance provider during a review of Indiana’s market.
First American’s title insurance is sold locally through eight brokerages, including three Meridian Title Corp. offices.
Lenders’ title insurance, which is usually required by banks and mortgage companies, “protect(s) the lender in the event the seller was not legally able to transfer the title of ownership rights,” according to Investopedia.com. The policy assures the lender that a title search was performed.
The property buyer pays a one-time fee for title insurance when a sale closes.
Stephen Robertson, the insurance department’s commissioner, ordered First American to reimburse consumers 38,142 for underpaying state taxes on premiums from 2006 to 2008.
Robertson also ordered the insurer to correct procedures that led to the mistakes.
First American asked a court to review the decision. The trial court upheld the order, finding at trial that First American overcharged consumers and underpaid premium taxes. The company has been ordered to pay the state $3,657,797.45, which includes interest on the overcharges.
The state insurance department will issue refunds to affected consumers after the penalty is paid, officials said.