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Citibank To Pay $110M In Force-Placed Insurance Settlement

Posted: February 5, 2014
By: David McAfee
Source: Law360
Outcome: Settlement
Practice Areas: Consumer Protection, Insurance & Financial Products & Services, Lending Practices & Borrowers’ Rights

Citibank NA has agreed to pay more than $110 million to settle a putative force-placed insurance class action accusing the bank of forcing homeowners to carry excessive flood and hazard coverage and profiting from it, according to documents filed Wednesday in New York federal court.

Named plaintiffs Gordon Casey, Duane Skinner and Celeste Coonan filed their motion for preliminary approval of the class action settlement, seeking to go forward with a deal that would end the dispute over force-placed insurance, which is placed on a home when the property owner's own insurance is cancelled or lapsed. Under the agreement, members of the class would receive more than $110 million in refunds of force-placed insurance premiums that Citi charged, according to court documents.

The deal would give settlement class members 12.5 percent of their premiums, which represents more than 83.3 percent of the allegedly unlawful commissions that Citi's affiliate received from its force-placed insurance vendor, according to the plaintiffs.


Shanon J. Carson of Berger & Montague PC, counsel to the plaintiffs, hailed the proposed deal.

"Plaintiffs are pleased to have reached this settlement, which will make substantial monetary and injunctive relief available to hundreds of thousands of class members," Carson told Law360. "It's a great settlement, and we look forward to presenting it to the court for approval."


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