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.
Fool contributor Eric Volkman has no position in Assurant. The Motley Fool has no position in Assurant. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.