Assurant Falls as California Seeks Rate Cuts: New York Mover
Assurant Inc. (AIZ) posted the largest decline in the Standard & Poor’s 500 Index after a California regulator directed insurers to lower rates for clients who lapsed on their previous residential policies.
Assurant dropped $1.31, or 3.1 percent, to $40.85 at 4:15 p.m. in New York, the biggest fall since January.
Insurance Commissioner Dave Jones contacted the 10-largest providers of so-called lender-placed coverage in California about his demand and told them to respond by April 1, his office said yesterday in a statement. Mortgage firms hire new insurance providers to shield against losses tied to storm damage or vandalism when borrowers fail to pay their premiums.
“Homeowners have complained that they are forced to pay for homeowners’ insurance purchased for them by their mortgage lender at a price higher than insurance they could obtain themselves,” Jones said in the statement. A state review found that “loss ratios are low, which typically points to excessive premiums and is evidence to support complaints.”
The insurer, which is more reliant on the coverage than rivals like Munich Re (MUV2) and QBE Insurance Group Ltd., has been discussing rates with California, Robert Byrd, a spokesman for the New York-based company, said in an e-mailed statement.
“As a regulated insurance provider in 50 states, we routinely work with regulatory authorities, and we look forward to continued discussions,” Byrd said yesterday.
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