Tamara Burns  |  August 27, 2015

Category: Consumer News

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JPMorgan ChaseA group of California plaintiffs decided to voluntarily dismiss a lawsuit against JPMorgan Chase and Assurant on Monday. The parties have settled outside of court, and they have not yet disclosed the details of the settlement. The group of plaintiffs had not been certified as a class yet, so their status also led to the nondisclosure regarding the settlement terms.

The plaintiffs alleged that JPMorgan worked exclusively with Assurant to issue forced-placed insurance policies for residential hazard insurance. JPMorgan required homeowners to have hazard insurance on their homes as a term of home mortgage loans. When homeowners had a lapse in coverage, the new coverage was automatically placed on the property and was maintained under Assurant.

The force-placed insurance policy allegedly had excessive levels of coverage (and thus higher premiums) and Assurant provided “referral commissions” to JPMorgan. These so-called referral commissions were kickbacks that reportedly earned JPMorgan nearly $1 billion in illegal revenue.

JPMorgan and Assurant were involved in a similar lawsuit in February 2014 in Florida. As a result of the Florida class action lawsuit, JPMorgan Chase and Assurant were to pay the class members $300 million in the settlement. Class Members were eligible for a 12.5 percent of the premium they paid, less any refunds previously issued. The estimated Class size included approximately 762,300 individuals.

The terms of the settlement in Florida prohibited JPMorgan and Assurant from raising insurance premiums on borrowers for six years. JPMorgan was also prohibited from accepting any commissions from Assurant, and Assurant was prohibited from paying any such commissions.

The Florida class action lawsuit required Class Members to submit claim forms to seek compensation from the settlement. Class Members thought this was an unnecessary step and suspected that JPMorgan and Assurant would be paying out a lot less than the $300 million that the settlement intended.

In 2012, this California class action lawsuit survived a motion to dismiss the case, and the case appeared to be headed toward mediation. The following year in 2013, the California plaintiffs filed an intervention motion that alleged the claim form submission requirement was actually a way for JPMorgan and Assurant to reduce their final payout. The California plaintiffs mentioned that in a similar force-placed hazard insurance settlement involving Wells Fargo, less than 10 percent of eligible Class Members submitted claim forms during the filing period.

The plaintiffs are represented by Edward W. Ciolko, Peter A. Muhic, Donna Siegel Moffa, Amanda R. Trask and Eli Greenstein of Kessler Topaz Meltzer & Check LLP, Christopher Johnson of Nix Patterson & Roach LLP, Eric T. Salpeter and James P. Gitkin of Salpeter Gitkin LLP, Brian D. Penny of Goldman Scarlato Karon & Penny PC, Kenneth G. Gilman of Gilman Law LLP, Eric D. Holland and Gerald B. Schneller of Holland Groves Schneller & Stolze LLC, and David Cates of Cates Mahoney LLC.

The JPMorgan Chase Force-Placed Insurance Lawsuit is In Re: JPMorgan Chase LPI Hazard Litigation, Case No. 3:11-cv-03058-JCS, in the U.S. District Court for the Northern District of California, San Francisco Division.

3 thoughts onJPMorgan Chase, Assurant Reach Force-Placed Insurance Settlement

  1. Raul Perales says:

    Add me please

  2. Costella Smith says:

    I had a mortgage with Wells Fargo and they refused to refinance my home when I was layed off in 2009 and they refinanced my neighbors home 3 of them in the same complex.they also claimed that I didnt have homeowners insurance and I did. Do you have anything concerning Wells Fargo?

  3. Sandra Wingren says:

    I have a different address. It is 1608 Falls of Venice Circle Venice Florida 34292, please send updated information here. Address when I had JPMorgan I lived at 3274 Spicewood Dr port Charlotte Florida 33981. I have sent in information for the lawsuits they have acquired. Still waiting on payment.

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