Stewart Title settles Calif 'kickback' allegations

LOS ANGELES Aug 28 (Reuters) - Stewart Title Guaranty Co agreed on Tuesday to pay more than $1 million in penalties and to stop paying "kickbacks" to builders, lenders and title agents to direct business its way, California Insurance Commissioner Steve Poizner said on Tuesday.

California regulators had sought nearly $47 million in damages and penalties from Stewart Title over accusations it paid $500,000 in "illegal kickbacks" to builders, lenders and title agents between 1998 and 2006, Poizner said in a statement.

A representative for Stewart Title, a unit of Stewart Information Services Corp (STC.N), could not be reached immediately for comment.

Stewart Title, which controls about 10 percent of California's title insurance market, had agreed to a financial settlement and to end the rebate practice.

The illegal payments resulted in higher closing costs in about 4,000 home purchases and refinancings, Poizner said.

Title insurance is required by bank and mortgage agencies to make sure that a home buyer has clear title to a property before they finance it. (Reporting by Gina Keating)