Drama washes over insurance industry as companies continue legal battles

Insurance Industry Legal Battles

Insurance industry still in turmoil after economic recession The controversies surrounding the U.S. insurance industry and its relation to the 2008 economic recession continue to prove to be an active battlefield. This week, AIG, one of the country’s largest insurance companies, has announced that it may pursue a lawsuit against Bank of America’s Countrywide insurance unit. The lawsuit accuses Countrywide of playing a role in the financial disaster. AIG was cleared to pursue this lawsuit after U.S. District Judge Mariana Pfaelzer approved of such action this week in Los Angeles,…

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FDIC files lawsuit against large banks responsible for small bank closures

Financial Lyme Disease Insurance News

Large banks accused of causing the failure of Illinois banks The Federal Deposit Insurance Corp. (FDIC) has filed lawsuits against several large banks this week after seizing control of two smaller banks in Illinois. These banks failed in May of 2009, but the FDIC only recently filed civil suits against the banks once its investigation into the matter came to a conclusion. The lawsuit names Citigroup, JPMorgan Chase, Bank of America, Credit Suisse, Deutche Bank, Royal Bank of Scotland, UBS and HSBC as defendant in the case. FDIC aims to recover…

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Investigation over home insurance includes Bank of America and Citigroup, among others

The state financial regulator in New York is currently conducting an inquiry regarding the possible overcharging of customers for force-place insurance, into large organizations such as Citigroup Inc. and Bank of America Corp. The focus of the probe is the service known as force-place insurance, which requires the a loan provider to purchase an insurance policy in the circumstance that a homeowner is unable to maintain insurance premiums on the property. According to industry experts, this practice is becoming increasingly common. The probe is being conducted by the office of…

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AIG files suit against Bank of America, looking to recover $10 billion in losses

American International Group (AIG), the U.S. largest insurer that has been steeped in controversy, has filed a lawsuit against Bank of American Corp. The insurer is looking to recover over $10 billion in losses from what it is calling “massive fraud.” The lawsuit is spurred by allegations of mortgage fraud stemming from the bank’s deals leading up to the 2008 economic recession. The suit claims that Bank of America misrepresented its mortgages as being of a higher quality than they actually were. According to the suit, filed with the New…

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Bank of America sells off Balboa Insurance

In order for the Bank of America to recover from the global credit crisis… It decided to divest to the QBE Insurance of Australia its Balboa Insurance, totaling to at least $700 million. This is the company’s most recent asset that was sold off, after selling the stakes BlackRock and China Construction Bank last year. These previous sales were done in an effort to repay the government bailout aids – adding them to the list of banks that made good on their debt. QBE is the largest insurance company in Australia, and after…

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