Back to top

Analyst Blog

Zacks Equity Research

BofA, HSBC Settle Forced Place Insurance Case

JPM C BAC HSBC

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

According to a Bloomberg report, Bank of America Corp. (BAC - Analyst Report) and HSBC Holdings plc (HSBC - Analyst Report) have resolved the force-placed insurance suits filed against them. The financial details of the respective settlements, however, have not been disclosed.

The settlements were revealed by the plaintiffs’ lawyers in the U.S. District Court, Southern District of Florida (Miami). The formal agreement for the same will be signed in the near term.

The class-action lawsuit was filed in 2012 on behalf of homeowners who were compelled to take insurance policies as of Jun 2008. The plaintiffs alleged that both BofA and HSBC had made substantial profit by signing deals with the insurer and overcharging the homeowners for insurance coverage.

Forced place insurance is generally ordered for those homeowners who refuse to buy insurance themselves or if their insurance coverage is not adequate.

The aforesaid settlement is the latest deal between homeowners and banks facing similar charges. Earlier this month, Citigroup Inc. (C - Analyst Report) agreed to pay $110 million to settle the class-action lawsuit in New York. The company was accused of overcharging thousands of homeowners for forced place insurances.

Additionally, in 2012, JPMorgan Chase & Co. (JPM - Analyst Report) and Assurant Inc. agreed to pay $300 million in aggregate to settle similar charges. While settling the lawsuit, both JPMorgan and Assurant neither accepted nor denied any of the allegations.

The settlement of the above-mentioned case removes a legal headwind for BofA and HSBC, thereby some relief. Meanwhile, regulators are striving to mete out justice to those who suffered losses.

Currently, BofA carries a Zacks Rank #3 (Hold) while HSBC has a Zacks Rank #4 (Sell).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ANI PHARMACE ANIP 24.83 +14.85%
BITAUTO HOLD BITA 35.20 +14.40%
E HOUSECHINA EJ 10.98 +9.15%
CANADIAN SOL CSIQ 27.02 +7.34%
KNIGHTSBRIDG VLCCF 12.46 +5.41%