Ivo Labar of Kerr & Wagstaffe Weighs in on Forced Place Insurance Debate
Online, September 18, 2012 (Newswire.com) - Bloomberg Businessweek reports that U.S. regulators have announced the intention to examine forced place insurance practices "amid allegations that rates are too high and two firms dominate the business." Coverage that is purchased by lenders when homeowners allow their insurance coverage to lapse or choose to forgo coverage, the cost of forced place insurance is passed on to the homeowners. Now, officials in Florida, Kentucky, and Louisiana are making plans to investigate the issue. Ivo Labar, Partner at Kerr & Wagstaffe, asserts that several class action lawsuits regarding this practice have already been filed.
According to the article, the industry in question is largely run by two companies. Assurant Inc. and QBE Insurance Group Ltd. own an estimated combined 90 percent of the market. Kevin McCarty, Florida's Insurance Commissioner, states: "What we're dealing with and have been dealing with is the potentially excessive rates. We're certainly going to continue to look critically at the business practices."
The article notes that, although Assurant has fallen 12 percent this year, premiums on force placed insurance more than tripled between 2004 and 2010. John Frobose, President of American Security Insurance, asserts that this growth was sparked by the increase in foreclosures. Additionally, he adds that the risk that force placed insurance faces is higher, so the premiums associated with force placed policies will naturally cost more.
Furthermore, Frobose believes that other companies could secure market share if they wished to
enter the industry. "If the big companies wanted back in, they could come back in," he asserts.
"Litigation involving forced place insurance is on the rise," comments Labar. "A number of class actions have been filed, with mixed success, involving this issue."
Robert Hartwig, President of the Insurance Information Institute, predicts that the market for forced place insurance will decline once foreclosures drop. Additionally, the improvement of the economy will play a role in returning peak premiums to more affordable prices.
ABOUT:
A Partner at the Law Firm of Kerr & Wagstaffe, Ivo Labar is a San Francisco-based attorney. Ivo Labar, with the Kerr & Wagstaffe team, assists clients in a variety of legal cases, ranging from intellectual property rights to insurance law. Additionally, Ivo Labar works with cases that are involved in both state and federal court proceedings and assists both plaintiffs and defendants. Through his work, Ivo Labar passionately advocates for his clients and specializes in complex litigation, including class action lawsuits, insurance policyholder rights, and victims' rights. Over the course of his career, he has assisted his clients in recovering over $25 million in settlements and verdicts. Labar graduated from the University of California Hastings College of the Law.