New York’s insurance regulator is investigating whether force-placed insurance rates charged by companies are excessive and is seeking information from Assurant Inc. and other insurers.
The state Department of Financial Services, saying it is seeking a basis for “consistently high profits” at the expense of homeowners and investors, is requiring information from a group of insurers, including Assurant units, QBE Insurance Corp. and Balboa Insurance Co., it said today in a statement.
“We have asked insurers to provide a complete breakdown of how much they collect and where every penny goes so we can determine if the premiums are appropriate and the basis for these payments,” Benjamin Lawsky, the department head, said in the statement.
Force-placed insurance is taken out on homes by banks or mortgage servicers when, for example, a homeowner’s policy lapses or the bank decides the borrower doesn’t have enough coverage.
The insurance regulator, which began the investigation in October, said there are “serious concerns” that premiums for the insurance have been “artificially inflated.” The inquiry is also looking into relationships among the insurers, banks, mortgage servicers and insurance agents and brokers.
Robert Byrd, an Assurant spokesman, said the New York-based company is “committed to cooperating” with the Department of Financial Services. Paula Symons, a spokeswoman for QBE, declined to comment. A Balboa representative couldn’t be reached for comment.
The department’s information demands to the companies were earlier reported by the Wall Street Journal.