STIPULATION AND WAIVER

CALIFORNIA DEPARTMENT OF INSURANCE
LEGAL DIVISION
Rebecca M. Westmore, Esq. SBN 148152
Mary Ann Shulman, Esq. SBN 190164
300 Capitol Mall, 17^th Floor
Sacramento, California 95814
Telephone: 916/492-3186
Facsimile: 916/324-1883
Attorneys for John Garamendi,
Insurance Commissioner

BEFORE THE INSURANCE COMMISSIONER
OF THE STATE OF CALIFORNIA
SACRAMENTO

In the Matter of the Licenses and Licensing Rights of:
INVESTORS TITLE COMPANY,

Respondent.

File No. VA 1022-AP
OAH No. L2005010076
STIPULATION AND WAIVER

Respondent, INVESTORS TITLE COMPANY ("INVESTORS") and the Department of Insurance ("Department") stipulate as set forth herein:

1. INVESTORS is licensed by the Insurance Commissioner to act as an underwritten

title company in the State of California, pursuant to Section 12389 of the California Insurance Code, ¹ and it is licensed to transact the business of title insurance in the counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura; and,

2. In

June 2001, the Department began investigating the operations of INVESTORS, pursuant to California Insurance Code §12389(c), after the Department received numerous

complaints and telephone calls that raised the issue of whether certain activities implemented by INVESTORS, from May 2000 through November 2001, constituted violations of California's insurance laws; that the examination occurred in several INVESTORS' branch offices in numerous counties in which INVESTORS owns and maintains title insurance offices; and that the investigation included interviews with employees of INVESTORS, and the examination of INVESTORS' books and records as authorized by California Insurance Code §12407; and,

3. On or about July 15, 2004, the Department caused to be served upon INVESTORS an Accusation, Notice of Noncompliance and Hearing, Demand for Monetary Penalty and Right to Issue Order to Show Cause, Statement of Charges and Notice of Hearing denominated "In the Matter of the Licenses and Licensing Rights of: INVESTORS TITLE COMPANY, Respondent, File No. VA 1022-AP, incorporated herein by reference,

and said Accusation alleged, inter alia, that INVESTORS engaged in unlawful rebate activities in violation of the requirements and standards of Article 6, Chapter 1, Part 6, Division 2 (commencing with §12404) of the Insurance Code; and,

INVESTORS and the Department have undertaken discussions to resolve the

issues in this proceeding and now wish to resolve those issues without the need for a hearing or further administrative action; and therefore INVESTORS waives any and all rights to a hearing in this matter, and any and all other rights related to this proceeding which may be accorded pursuant to Chapter 5, Part 1, Division 3, Title 2 (commencing with §11500) of the California Government Code, and by the California Insurance Code; and,

INVESTORS agrees to and shall Cease and Desist from engaging in any

activities which may be in violation of, or noncompliant with, Article 6, chapter 1, Part 6, Division 2 (commencing with §12404) of the Insurance Code upon written Order of the Insurance Commissioner to be made and filed herein and without further notice to INVESTORS; and,

INVESTORS agrees to and shall comply with the provisions of

California Insurance Code §12404 prohibiting illegal rebate/inducement activities upon written Order of the Insurance Commissioner to be made and filed herein and without further notice to INVESTORS; and,

INVESTORS agrees to and shall suspend, for a period of ten (10) business

days, all business development and marketing activities for each individual who is currently employed by INVESTORS and/or its affiliates, and who was alleged in the Accusation to have violated California Insurance Code §12404 et seq. following written Order of the Insurance Commissioner to be made and filed herein and without further notice to INVESTORS; and,

INVESTORS agrees to and shall

pay, within ten (10) days of the date of the

signed Order by the Commissioner, the amount of one million dollars ($1,000,000) to the California Department of Insurance as a monetary penalty pursuant to California Insurance Code §§12409 and 12976 upon written Order of the Insurance Commissioner to be made and filed herein and without further notice to INVESTORS; and,

INVESTORS agrees to and shall pay, within ten (10) days of the date of the

signed Order by the Commissioner, the amount of fifty two thousand nine hundred seventy four dollars ($52,974.00) to the California Department of Insurance for reimbursement of costs pursuant to California Insurance Code §12389 upon written Order of the Insurance Commissioner to be made and filed herein and without further notice to INVESTORS; and,

10.

INVESTORS agrees to and shall pay, within ten (10) days of the date of the

signed Order by the Commissioner, the amount of five thousand dollars ($5,000.00) to the California Department of Insurance to resolve the allegation that INVESTORS failed to comply with a final Order of the Commissioner, dated May 1, 2000 in File No. SF 15326 AP, upon written Order of the Insurance Commissioner to be made and filed herein and without further notice to INVESTORS; and,

11.

Neither

this Stipulation and Waiver nor the Order approving this Stipulation

and Waiver are in any way intended to limit or waive the Commissioner's authority to bring further disciplinary action against INVESTORS for violations not covered by the Accusation or this Stipulation and Waiver; and,

12. Nothing

contained in this Stipulation and Waiver or the Order approving this Stipulation and Waiver shall prevent the Department from taking action at any time to enforce this Stipulation and Waiver or the Order approving this Stipulation and Waiver if the Department believes that INVESTORS is not in compliance with the terms and conditions of the Stipulation and Waiver and/or the Order approving this Stipulation and Waiver; and,

13. The Insurance Commissioner retains jurisdiction to ensure that Respondent complies with the provisions and terms of this Stipulation and Waiver and/or Order approving this Stipulation and Waiver; and;

14.

This compromise settlement is not an admission of liability,

wrongdoing or violation of law, and no factual findings or legal conclusions have been made; and,

15.

INVESTORS represents and warrants that the persons executing this

Stipulation and Waiver on behalf of Respondent are authorized to enter into and execute this Stipulation and waiver; and,
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16.

Pursuant to California Insurance Code §12921(b)(1), this Stipulation and

Waiver is not final unless and until approved by the Insurance Commissioner as evidenced by an order of the Commissioner expressly adopting this Stipulation and Waiver.
Dated: June 17, 2005 INVESTORS TITLE COMPANY

By: __________________________________

John Harritt

President

Dated: June 17, 2005 SONNENSCHEIN NATH & ROSENTHAL LLP

By: _________________________________

Gary A. Hernandez Attorneys for Respondent

INVESTORS TITLE COMPANY

Dated: June 17, 2005 CALIFORNIA DEPARTMENT OF INSURANCE

By: _________________________________

Mary Ann Shulman

Senior Staff Counsel

ORDER

The preceding Stipulation and Waiver is hereby adopted as the Order of the

Insurance Commissioner of the State of California.
Dated: _______________, 2005 JOHN GARAMENDI

Insurance Commissioner

______________________________________

¹ Unless otherwise stated, all references are to the California Insurance Code.

Last Revised - July 12, 2005 Copyright © California Department of Insurance Disclaimer

Last Revised - July 12, 2005
Copyright © California Department of Insurance
Disclaimer