Florida slashes rates by $98 million for force-placed insurer; advocates want more
Feb 11, 2013
The following article was published in The Palm Beach Post on February 11, 2013:
By Charles Elmore
Florida regulators said today they approved an 18.8 percent decrease in rates for Praetorian Insurance Co., one of the major insurers that cut deals with lenders to provide expensive homeowners insurance to replace customer policies that lapsed.
The move affects 126,336 policies representing a premium volume of $521 million and represents savings to consumers of $98 million, the state’s Office of Insurance Regulation said.
The “force-placed” policies can cost up to 10 times what regular policies do, and have triggered a consumer backlash, lawsuits and a push for new federal guidelines.
The Consumer Federation of America had called for a 44 percent cut for Praetorian in Florida rate hearings, saying the insurer took in excessive profits and paid what the consumer group called kickbacks to banks and other mortgage servicers.
“I’m encouraged this is a step in the right direction but discouraged it didn’t go further, ” CFA insurance director J. Robert Hunter said.
Praetorian, affiliated with QBE Specialty Insurance Co. and Balboa Insurance Co., initially sought a 2 percent decrease and later submitted a revised filing. Attempts to reach a company spokesperson were not successful.
Mortgage servicer Wells Fargo pushed at least 20,000 Florida customers into buying property insurance at inflated prices, according to a lawsuit that a South Florida judge certified for class action last year.
Wells Fargo and QBE Speciality Insurance Co. contrived an agreement to charge up to 10 times the market price for such policies and split commissions of 40 percent, the suit alleged.
“We disagree with a number of representations” by plaintiffs attorneys, Wells Fargo spokeswoman Vickee Adams said at the time. The company had no intention of harming customers, she said.
Wells Fargo Home Mortgage no longer works with QBE for any of its insurance services, Adams said Monday.
Miami-Dade, Broward and Palm Beach were among the counties where customers were heavily affected, said plaintiff attorney Howard Bushman of Miami.
Praetorian agreed to submit another rate filing Feb. 1, 2014 with additional information.
By March 1, state regulators said they expect a rate filing from American Security, Florida’s largest force-placed or “lender-placed” insurer.
View the original article here: http://www.palmbeachpost.com/news/business/state-slashes-rates-by-98-million-for-force-placed/nWL7H/
- Florida Insurance Litigation
- Insurance Regulatory News
- Florida News
- Archive – News
- Florida Office of Insurance Regulation
- Florida Department of Financial Services
- Florida Department of Revenue
- Florida Hurricane Catastrophe Fund
- Florida Insurance and Political Headlines
- Archive – Seminars
- Florida Workers' Compensation
- Life & Health
- Florida Commission on Hurricane Loss Projection Methodology
- Auto Insurance
- Citizens Property Insurance Corporation
- Surplus Lines
- Department of Business and Professional Regulation
- Financial Services Commission
- National News
- National Insurance Regulation News and Updates
- Market Regulation and Consumer Affairs Committee
- Group Solvency Issues Working Group
- National Meetings
- International Insurance Relations Committee
- International Solvency and Accounting Working Group
- Property and Casualty Insurance Committee
- Suitability of Annuity Sales Working Group
- Surplus Lines Task Force
- Capital and Surplus Relief Working Group
- Casualty Actuarial and Statistical Task Force
- Catastrophe Insurance Working Group
- Climate Change and Global Warming Task Force
- Corporate Governance Subgroup
- Property Risk-Based Capital Working Group
- Solvency Modernization Initiative Task Force
- Executive Committee
- Reinsurance Task Force
- Financial Condition Committee
- Financial Standards and Accreditation Committee
- Life Risk-Based Capital Working Group
- Federal Regulatory Issues
- Florida News
- Florida Legislative News
- Legislative Updates
- Department of Juvenile Justice
- Executive Branch
- Property Tax and Education News
- Florida Dismantlers & Recyclers
- Florida Police Chiefs Association
- Florida Property & Casualty Association
- U.S. Department of the Treasury
- Business Litigation
- Firm News