“Many of the properties we insure have a history of multiple losses,” said Gene Mergelmeyer, president of the New York-based company’s specialty unit, in a conference call today.
Assurant held the call after its stock fell as much as 17 percent today, following an American Banker article on the market for so-called force-placed coverage. Mortgage servicers are profiting at the expense of homeowners and investors by taking payments from the insurers they select to issue force- placed policies on properties where distressed borrowers allow their original coverage to lapse, American Banker said.
Assurant pays commissions that are comparable to those paid by insurers in the voluntary market, Mergelmeyer said. The company’s average policy costs about $2,000 and the average value of the homes it covers is $180,000, the company said. Mergelmeyer is also chief executive officer of the unit.