Foreword to CLTA California Anti-Rebate Law Training Manual
This Training Manual is designed to provide members of the California Land Title Association readily accessible material for suggested use in setting forth some of the requirements of the California Insurance Code. Its use is not required by the CLTA nor has the Training Manual been approved by the California Department of Insurance. This Training Manual is solely for the use of California Land Title Association members for informational purposes and cannot be used by anyone for any other purpose whatsoever without express written permission from CLTA.
The Training Material contains highlights of the basic requirements pertaining to marketing practices and the licensing of title marketing representatives. This training material is no more than a guide. No guide can anticipate all possible situations, nor can any guide provide irrevocable rules for dealing with questions which may arise. No guidelines can be written to cover every conceivable situation. The Manual is not a textbook and is not intended to be relied upon as a statement of the law by the CLTA members or their employees or any other person.
A CLTA member may make use of conflicting or additional material since this Training Material is merely informational and not intended to be a conclusive statement of the law or any interpretation of specific marketing practices or the views or opinions of the California Department of Insurance. The material of any particular CLTA member may well vary from that of any other member. It is understood by the CLTA and CLTA members that this Training Manual may be revised, edited or supplemented by the CLTA or any CLTA member company based upon additional facts, legal research and advice, review of specific practices, interpretations, guidance, and regulations by the California Department of Insurance, as well as any other factors relevant to compliance with the requirements of the California Insurance Code.
California Land Title Association makes no express or implied warranty respecting the information presented and assumes no responsibility for errors or omissions.
California Anti-Rebate Law California Land Title Association November, 2008
“ It is unlawful . . . to pay , directly or indirectly, any . . . consideration to any person as an inducement for the placement or referral of title business . Actual placement or referral of title business is not a precondition to a violation . . .”
“ Title business” specifically includes escrow .
“ Person” ( aka “12404 Person” ) = Sellers, buyers, borrowers, lenders and agents, attorneys or employees of those persons.
“ No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise , that business incident to . . . a real estate settlement service . . . shall be referred to any person.”
Advertising or paying for the advertising in any newspaper, newsletter, magazine, or publication that is produced by, or on behalf of, a person, or that results in a direct, or indirect, subsidy to a person.
A proceeding to deny or revoke a certificate of registration is initiated by filing an “accusation,”,which is a written statement setting forth the acts with which the respondent is charged.
The agency must serve a copy of the accusation on the respondent.
The agency may request a hearing by filing a “statement of issues”, which is written statement specifying the statutes and rules alleged to have been violated and the information alleged by the Department of Insurance.
Within 15 days after service of the accusation the respondent may file a notice of defense and, if the agency has not requested a hearing, the respondent may request a hearing. If the holder of the certificate does not request a hearing the agency may proceed upon the accusation without a hearing.
The respondent is entitled to discovery of evidence in the agency’s possession
Contested hearings are presided over by an administrative law judge.
Witnesses may be called by both parties.
The proceedings at the hearing are reported by a stenographic reporter.
A decision is rendered by the administrative law judge.
The respondent is entitled to appeal the decision to the Superior Court.
“ An employee of a title company who corruptly violates . . . the Insurance Code by paying , directly or indirectly . . . compensation . . . to a real estate agent , or a real estate agent who corruptly receives such compensation, as an inducement for the . . . referral of title business , is guilty of commercial bribery.”
“ Commercial bribery is punishable by imprisonment in a county jail for not more than one year , or by a fine of . . . $10,000 for each unlawful transaction, or by both a fine and imprisonment.”
Prohibitions apply even if the title company does not reimburse the title employee’s expenses .
Ins. Code 12408.5: An “employee . . . shall not, directly or indirectly, pay or offer to pay any part of his or her compensation . . . to any person . . . as an inducement for . . . any title insurance or escrow business, and any payment or offer to pay this consideration is an unlawful rebate. ”
Ins. Code 12405: A title company cannot “ quote any fee or make any charge for a title policy to any person [other than] as set forth in its then currently effective schedule of fees and charges.”
Ins. Code 12481.4: “The Department may revoke, suspend, restrict, or decline to issue a certificate of registration if it determines that the title marketing representative or applicant has violated provisions of Article 6 [includes Section 12405].”
So . . . Do not quote a rate that is not a filed rate.