Insurance for Lapsed Borrowers Lacks Oversight: Regulator

Coverage for homeowners who have lapsed on existing policies lacks oversight and the market resembles a monopoly, said James Donelon, commissioner of the Louisiana Department of Insurance.

The so-called force-placed insurance industry in the U.S. has “grown into a monopoly situation that is perpetuating itself,” Donelon said today at a hearing in Atlanta held by the National Association of Insurance Commissioners. “The system is being extremely profitable for the two remaining companies in the market. Nobody is minding the store.”

Donelon said he was referring to Assurant Inc. (AIZ) and QBE Insurance Group Ltd.

To contact the reporters on this story: Zachary Tracer in New York at ztracer1@bloomberg.net; David Beasley in New York at dbeasley3@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net