Skip to Content

PNC, Insurers Accused Of Captive Reinsurance Scheme

Posted: January 3, 2012
By: Allison Grande
Source: Law360

A putative class of homeowners sued PNC Financial Services Group Inc. and several insurers Friday in Pennsylvania federal court, alleging a captive reinsurance scheme under which the lender received kickbacks for referring its mortgage customers to the insurers.

In violation of the Real Estate Settlement Procedures Act of 1974, the insurers paid PNC predecessor National City Corp. and its affiliated reinsurer National City Mortgage Insurance Co. Inc. payments in the form of purported reinsurance premiums and gave National City an unlawful split of private mortgage insurance premiums paid by customers that had been referred to the insurers by National City entities, the complaint alleges.

As a result of this arrangement, NCMIC collected at least $219 million from private mortgage insurers as its share of borrowers' private mortgage insurance premiums between the beginning of 2004 through the end of 2010, even though its actual share of paid claims during this time was only $12 million, according to the complaint.

View the full article here.

To have a Berger & Montague attorney evaluate your potential case at no cost to you, fill out the contact form on the right.