A closer look into forced placed insurance practices The state insurance regulator in New York is currently performing an investigation as to whether or not the rates for force-placed insurance that are being charged by companies should be deemed excessive, and is requesting data from insurers such as Assurant Inc. The New York Department of Financial Services released a statement that said that it is trying to obtain basis for “consistently high profits” that are occurring at the investors’ and homeowners’ expense. It is also requiring that insurers such as…
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New York regulators pressure Citigroup to comply with subpoena
New York insurance regulators are pressuring Citigroup to comply with a subpoena regarding investigations into force-placed insurance. Force-placed insurance has long been a source of controversy. These policies require homeowners to purchase coverage that is much more expensive than conventional policies. This is often done for the sake of lenders who hold sway with insurance companies and the tactic is used to secure returns on these investments. The New York Department of Financial Services has been investigating a number of insurance companies and financial institutions that may have been conducting…
Read MoreInvestigation 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…
Read MoreHouse votes to renew the National Flood Insurance Program for another five years
The National Flood Insurance Program has been renewed for another five years, after a vote from the House on Tuesday. The program has been struggling financially for several years, unable to withstand the burden of past disasters and new clients. It has long been the last place people could find affordable flood insurance, especially after Hurricane Katrina drove many insurers away from coastal states. The program’s fate now lies in the hands of Congress, who must determine the final course of action before September 30th, when the program will expire…
Read MoreForced place insurance for businesses in Austrailia
In light of the recent disasters befalling the nation, the Australian government may be setting up an inquiry to determine whether states should be forced to purchase commercial insurance policies to cover natural disasters. Legislators are currently pushing to pass a $1.8 billion deal that would help reconstruct levees. The possibility of an inquiry was raised when Treasurer Wayne Swan suggested that there “legitimate questions” about what states had done regarding insurance. Swan said that “it is probably timely for us to evaluate all of those questions, to have a…
Read More“Forced Placement” insurance rates are through the roof
“Forced placement” is when a lender buys a policy for a borrower at premiums that can significantly increase the price of insurance. If you fail to renew your own homeowner’s insurance and the lender finds out, they will automatically purchase this coverage for you. The new coverage is more expensive and doesn’t have the same coverage as your homeowner’s policy would. J. Robert Hunter of the Consumer Federation of America, feels the problem began because lenders and insurance companies have “set up sweetheart deals… and get all sorts of kickbacks.”…
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