JPMorgan in $300 million settlement over force-placed insurance

Mon Sep 9, 2013 4:13pm EDT
 
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By Dena Aubin

NEW YORK (Reuters) - JPMorgan Chase & Co (JPM.N: Quote) and a major insurer have agreed to a $300 million settlement to resolve accusations that they forced homeowners into over-priced property insurance and entered into kickback arrangements that inflated the policies' prices.

The lawsuit being settled - one of several targeting large U.S. banks over force-placed insurance - said that the improper practices unjustly enriched JPMorgan and insurer Assurant Inc by more than $1 billion since 2008.

JPMorgan and Assurant did not admit any wrongdoing as part of the settlement, which was in documents filed late on Friday in a Miami federal court.

"The settlement will have no expected impact on our financials," JPMorgan spokeswoman Amy Bonitatibus said in a statement. She said the bank earlier this year discontinued a reinsurance agreement with Assurant.

The settlement calls for JPMorgan to stop accepting commissions for force-placed insurance.

The JPMorgan settlement is the first nationally to result from several cases against banks pending in Miami federal court that involve force-placed insurance.

REGULATORS TARGET PRACTICE

Banks have been under increasing scrutiny from regulators over force-placed insurance, which is placed by a bank or other mortgage lender to protect their interests in a property if the homeowner's insurance lapses.   Continued...

 
A sign stands in front of the JPMorgan Chase & Co bank headquarters building in New York, March 15, 2013. REUTERS/Lucas Jackson