On September 7, 2016, the Massachusetts Attorney General (“AG”) announced that it reached a settlement with a Massachusetts force-placed insurance company relating to allegations that it improperly charged homeowners for insurance.
According to the Massachusetts AG, mortgage lenders improperly provided homeowners with duplicative force-placed insurance policies through the subject insurance company, despite the fact that the homeowners already had their own insurance policies through other companies. The insurance company was also overcharging certain homeowners based on improper classifications of their properties.
The AG will be conducting an audit to determine all customers eligible for full restitution. Currently, the AG’s investigation has revealed improper charges totaling more than $1 million, which will be refunded to consumers under the terms of the settlement. The insurance company will be required to pay in restitution the full amount identified by the AG in its audit, and $375,000 in civil penalties .
This is the AG’s third settlement in the past year concerning allegedly unnecessary and overpriced force-placed insurance, coming on the heals of similar settlements in November 2015 and February 2016. Enforcement Watch previously reported on the November 2015 settlement here and February 2016 settlement here.