Regulators to Review Forced-Place Insurance

Regulators are looking at the rates and business practices of companies that provide force-placed coverage.  Force-placed coverage is insurance for mortgage lenders when homeowners stop or become unable to pay their policies.  There have also been accusations that the entire force-placed coverage market is a monopoly as two companies, Assurant, Inc. and QBE Insurance Group, Ltd., provide 90% of the policies.  This review was prompted by the fact that premiums paid for force-placed insurance have more than tripled in the last six years.  These insurers also typically pay-out less than with other types of home insurance policies.  The average pay-out for force-placed insurance is 25 cents per dollar of premium collected, compared to 63 cents/dollar on a typical homeowner’s policy.

Here’s a link to the full article: http://www.bloomberg.com/news/2012-08-10/u-s-regulators-to-examine-forced-place-insurance.html

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