Wells Fargo, Assurant Reach Class Action Settlement Over Force-Placed Insurance

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

Wells Fargo Bank NA and Assurant Inc. reached a settlement with homeowners to resolve a class action lawsuit, alleging that the bank and the insurer engaged in a force-placed insurance practice which gave kickbacks to Wells Fargo.

The details of the force-placed insurance class action settlement were not disclosed, but an Assurant spokesman said that it was linked with a different class action settlement in a Florida federal court, most likely Fladell et al. v. Wells Fargo Bank NA et al.

That class action lawsuit also accused Wells Fargo and Assurant of similar force-placed insurance issues. Those customers were given “significant monetary relief.” Class members in the force-placed insurance class action settlement in Florida were sent cash payments seven to 11 percent of what they had paid in insurance premiums.

Assurant said in a statement that the settlements are not an admission of guilt.

“We do not acknowledge any wrongdoing in either case, but feel it’s in the best interest of our company to attempt to resolve these matters,” the insurer said.

Both force-placed class action lawsuits accused Wells Fargo of reaching an agreement to only purchase force-placed insurance through Assurant and its subsidiaries such as American Security Insurance Co., which is also a named defendant in the class action lawsuit, for its force-placed insurance needs.

In exchange, Assurant would charge inflated premiums for the force-placed insurance and share with Wells Fargo a kickback as a commission for the sale, which would be up to 10 times the going rate for such policies.

The force-placed insurance class action lawsuit filed in the Illinois federal court alleged that the class members were then forced to pay the unnecessary inflated home owners insurance coverage retroactively even though no loss was reported during those periods.

They also accused Well Fargo of misappropriating money in their escrow accounts, engaging in violations of fiduciary duties, and breaching its contracts.

Wells Fargo defended its actions saying that the practice of receiving commissions for the force-placed insurance was disclosed to class members. The bank also said that customers were made well aware that force-placed insurance would cost more than their own home owners insurance.

The force-placed insurance class action lawsuit was filed against Wells Fargo and Assurant in the Illinois federal court in July 2012. It includes customers from Illinois, Texas and New York.

On May 5, Wells Fargo and Assurant were hit with another force-placed insurance class action lawsuit.

Assurant has also been named in class action lawsuits over force-placed insurance practices with other banks.

In 2015, the insurer has reached settlements with other borrowers connected to other lenders to the tune of $141.8 million.

The putative class is represented by Eric D. Holland and R. Seth Crompton of Holland Law Firm, Shanon J. Carson and Patrick Madden of Berger & Montague PC, Peter A. Muhic, Edward W. Ciolko and Tyler S. Graden of Kessler Topaz Meltzer & Check LLP, David Cates of Cates Mahoney LLC, Charles Schaffer of Levin, Fishbein, Sedran & Berman, Brian D. Penny of Golden Scalto Karon & Penny PC, Jeffery J. Angelovich, Michael B. Angelovich, Brad Seidel and Christopher Johnson of Nix, Patterson & Roach LLP and John D. Zaremba of Zaremba Brownell & Brown PLLC.

Wells Fargo is represented by Michael J. Steiner, Rebecca S. Saelao and Erik Kemp ofSeverson & Werson and Maria G. Zschoche and David Wells of Thomas Coburn LLP.

Assurant is represented by Frank G. Burt, Farrokh Jhabvala and Landon K. Clayman ofCarlton Fields Jorden Burt PA and William G. Beatty of Johnson & Bell LTD.

The Wells Fargo Assurant Force-Placed Insurance Class Action Lawsuit is Simpkins v. Wells Fargo Bank, N.A. et al, Case No. 3:12-cv-00768, in the U.S. District Court for the Southern District of Illinois.