Munich Re’s American Modern Insurance unit agreed to pay a $1 million penalty, provide customer refunds and make reforms after a probe into kickbacks paid to banks, New York’s financial-services regulator said.
Chubb Corp., Fidelity and Deposit Co. of Maryland and FinSecure agreed to reforms and weren’t fined because they didn’t pay kickbacks, New York’s Department of Financial Services said today in an e-mailed statement.
The state’s investigation focused on force-placed policies, or mandatory coverage for mortgage borrowers who lapse on insurance payments with their original carriers. Assurant Inc. and QBE Insurance Group Ltd. settled with the New York regulator earlier this year.
“The agreement will allow American Modern to re-focus its resources and attention on continuing to serve the important needs of the lender insurance market in New York,” American Modern said in an e-mailed statement.
Editors: Dan Reichl, Dan Kraut