Assurant (AIZ) said late Monday that its insurance unit American Security Insurance reached an agreement with the California Department of Insurance to reduce premiums charged on lender-placed insurance by 30.5%.
The reduction in premiums will result in ()
"Today's agreement between American Security Insurance Co. and the California Department of Insurance, to reduce rates on lender-placed insurance, reflects prior loss experience and current assumptions about future experience that will apply going forward in the state," the company said in a statement.
Lender-placed, or force-placed insurance, has been the subject of some national scrutiny this year.
Investigatory hearings regarding the insurance were held in the states of New York and Florida, as well as at the annual meeting of the National Association of Insurance Commissioners in August.
In March, the California's insurance commissioner contacted the largest insurers to express concerns about what was characterized as "apparent excessive rates," and directed insurers to submit new rate filings with the state to determine if rates could be reduced.
The CDI agreement with Assurant represents the state's first such agreement with a major insurer in the state to lower its rates.
"This is a significant rate reduction for many California homeowners," said California Insurance Commissioner Dave Jones in a statement. "At a time when scores of Californians are facing economic uncertainty and underwater mortgages, we heard complaints from homeowners being forced into lender-placed policies at exorbitant prices."
Jones also commended Assurant for the agreement and signaled other rate reduction agreements may be coming.
Assurant said its ()