Assurant (NYSE: AIZ ) has reached a $14 million agreement with New York's Department of Financial Services over its business practices in relation to forced-place loans. Without admitting or denying any wrongdoing, the company is to pay the settlement amount, modify some of its business practices, and establish a refund opportunity program for eligible property owners, among other requirements.
Forced-place insurance providers, including Assurant, were collectively the target of a DFS investigation into the industry's business practices. The investigation found that premiums for such insurance could be several times higher than those for voluntary insurance.
Forced-place is a type of insurance taken out by a lender on a piece of property. This occurs at times when a borrower cannot or will not continue to carry the homeowner insurance required by the terms of their mortgage.
According to the DFS, Assurant is the largest force-placed insurer in the country.