JPMorgan Chase and Assurant have agreed to pay $300m to resolve the force-placed insurance charges levied upon them.
The lawsuit filed at Miami federal court claimed that both the firms forced homeowners to pay over-priced insurance and for inflating the policies’ prices through illegal schemes.
Assurant is expected to have placed about 1.3 million policies for JPMorgan Chase, generating over $2.4bn in force-placed premiums since 2008.
Adopting such improper practices helped JPMorgan and insurer Assurant make more than $1bn since 2008, the lawsuit added.
Assurant spokesman said it provided lender-placed insurance on thousands of homes where original coverage has lapsed, in accordance with the terms of the mortgage and all applicable regulations.
JPMorgan spokeswoman Amy Bonitatibus said the settlement will have no expected impact on their financials.
The settlement, which is subject to court approval, demanded JPMorgan to stop accepting commissions for force-placed insurance.
The lawsuit was filed by Kozyak Tropin & Throckmorton, Podhurst Orseck, and Harke Clasby & Bushman.