WASHINGTON–The House Financial Services Committee is escalatingits investigation into allegations of title insurers' use ofillegal rebates and referral fees.

In a letter sent May 24, it requested documents and records froma Virginia title insurance company relating to a Colorado InsuranceDepartment investigation of alleged illegal kickback schemes.

The information was requested from LandAmerica Financial Group,one of the largest title insurance underwriters. It is based inRichmond, Va.

The House panel's request stems from settlement talks betweenColorado Deputy Insurance Commissioner Erin Toll and LandAmerica,which are aimed at reaching an agreement relating to herdepartment's probe of LandAmerica, a department spokesman saidFriday.

State official Geoffrey Heir said LandAmerica tried to have Ms.Toll removed from the settlement activity, alleging in a letter toColorado Insurance Commissioner David Rivera earlier this monththat Ms. Toll has a conflict of interest and the probe is based ona false premise.

The letter asked that Ms. Toll not participate in the talks, Mr.Heir said.

Mr. Rivera, however, said he found no basis for such claims anddeclined to remove Ms. Toll from the case, Mr. Heir said.

The House Financial Services Committee said in its letter toLandAmerica that it has received additional evidence corroboratingtestimony regarding the alleged illegal activity.

Peter Habenicht, vice president, corporate communications forLandAmerica, said in a statement late Thursday, “We respectfullydisagree with the characterization and substance of the assertionsmade recently by Ms. Toll.

“LandAmerica has been and is committed to cooperating with allstate regulators, and we are working to achieve a resolution withthe Colorado Department of Insurance and will willingly cooperatewith the House Financial Services Committee.”

The letter followed by one day an agreement between New YorkAttorney General Eliot Spitzer and two title insurers–FidelityNational Title Group Inc. and First American Title InsuranceCompany–in which the companies agreed to seek title insurance ratereductions of 15 percent for all properties up to $1 million in NewYork.

The New York probe revealed evidence of an illegal scheme bywhich real estate developers would receive free or discounted titleinsurance in other states in exchange for giving their New Yorkbusiness to the settling insurance companies.

Ms. Toll testified before the panel in April as a representativeof the state and the National Association of InsuranceCommissioners. Ms. Toll presented evidence of illegal kickbacks inviolation of the Real Estate Settlement Procedures Act.

She was one of a number of witnesses including consumerrepresentatives and insurer representatives. Industry officialsdefended industry practices.

The committee's letter to LandAmerica was signed by Reps. MikeG. Oxley, R-Ohio, chairman of the panel, and Barney Frank, D-Mass.,ranking minority member.

The letter sought the information “in response to testimony andevidence…that raised questions of indirect threats to limitCommissioner Toll's testimony and her involvement in a proposedstate title insurance settlement,” the letter said.

Ms. Toll, who heads the NAIC Task Force on Title Insurance, inFebruary 2005 began investigating nine Colorado title insurers foralleged kickback schemes that resulted in overcharges to consumersfor title insurance services.

According to Ms. Toll the insurers paid various firms forlittle-needed reinsurance with policy payments to captivereinsurers that served as a method of covering what were in effectkickbacks

Her probe prompted a number of states to launch similar probes,including New York, Florida, Washington, Hawaii, California,Oklahoma and Minnesota.