A fine totaling $500,000 was leveled against real estate title company Fidelity National Financial Group by the Missouri Insurance Department for alleged violation of insurance laws in the state. The state agency examined four title units of the insurance firm and allegedly found incorrect fees and premium charges.

Based on the state department’s examination, customers of Fidelity were charged with premiums and fees that were incorrect during closings of real estate deals. The department further added that the insurance firm had used insurance policies without the approval of the department.

On top of the fines leveled against the firm, the insurance department also required Fidelity National to make corrections to its business practices and give back the money to clients who were charged more than they should for property closings.

Officials from the state department of insurance have stated that in closing a real property transaction, consumers often have to deal with numerous legal documents which could be overwhelming for them. They added that consumers often do not provide the necessary attention to these documents, so it is the responsibility of the department, the title insurers and lenders to make sure that these consumers are protected.

When examining a real estate title company, the department looks at documents pertaining to charges the company had made, the method used to handle claims, policyholder treatment and other legal responsibilities that a title firm has over the transaction.

Such market examinations can result in consumer refunds, corrections in corporate practices, fines and other remedies designed to adjust whatever error was committed during the transactions.

The state insurance agency has also reported that the Market Conduct Section of the law governing property insurance has recovered an estimated $6 million in consumer refunds and has leveled $3 million fines since its inception in 2008. The money recovered from these market examinations goes to the Missouri State School Fund.

Under existing property insurance laws, a real estate title company has the responsibility of protecting lenders and landowners against property claims that are made based on an already existing problem prior to the insured owner’s purchase of the property. The claim could cover unpaid property taxes, incorrect lines of boundaries, a lien and other problems.

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