The Securities and Exchange Commission has put the pressure on the company to release these details.
Assurant Inc. is currently under review regarding whether or not it has been overcharging for force placed insurance purchased on behalf of some homeowners, and has broadened its disclosure regarding the profits this activity has generated, following an inquiry by the Securities and Exchange Commission (SEC).
According to the insurer’s data, this coverage represented 89 percent of the specialty property profits in Q1 and Q2.
Throughout the first half of the year, the company collected $36 million in premiums from its force placed insurance in New York, and another $54 million from California, from January through June of 2012.
This, according to Assurant’s regulatory filing for Q2 after the SEC’s correspondence with them.
The New York based firm is not the only one being investigated regarding force placed insurance. In fact insurers in that state as well as California and Florida are facing significant pressure to reduce their premiums following inquiries as to whether that company and QBE Insurance Group Ltd. are charging rates that are too high.
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A hearing was held on the topic of force placed insurance last month.
This was held by the National Association of Insurance Commissioners (NAIC), which is a state regulator organization. There, Assurant allowed the NAIC and other watchdog groups to take a closer look at their force placed insurance business.
According to a letter to the SEC by Assurant, back on June 29, “The company has experienced an increase in the number of inquiries from departments of insurance and other regulators.” It added that “If in the aggregate such reviews lead to significant decreases in premium rates for the company’s lender-placed insurance products, our results of operations could be materially adversely affected.”
This force placed insurance investigation caused Assurant to experience the largest stock decline among all of the companies in the KBW Insurance Index, when it fell by 1.7 percent. This year, it has slipped by a total of 18 percent so far. This type of coverage is the sort that is purchased on behalf of mortgage borrowers by their lenders, and is paid for by the borrowers when they have allowed their regular homeowners coverage to lapse.