More on the Filed Rate Doctrine and Force-Placed Insurance

By Stephen A. Fogdall and Monica C. Platt

Last week, we reported on a decision out of the Southern District of New York holding that the filed rate doctrine does not apply to force-placed insurance rates because they are “secondarily billed” to the borrower. We plan to monitor this issue closely to see if other courts reach the same conclusion.

Recently, a judge in the United States District Court for the Northern District of Mississippi did not reach this conclusion.  The case is Singleton v. Wells Fargo Bank.

In Singleton, the plaintiff sued her loan servicer and a force-placed insurer, asserting violations of RESPA and other claims.  The plaintiff alleged that the servicer had agreed to give all of its force-placed business to the insurer in exchange for kickbacks.  The plaintiff said that the exclusive relationship allowed the insurer to charge inflated rates for the insurance, and that the rates were further inflated because they supposedly included the kickbacks to the servicer.

In fact, the rates had been reviewed and approved by the Mississippi Department of Insurance.  The defendants argued that the plaintiff’s claims were therefore barred by the filed rate doctrine.

The plaintiff argued in response that she was not challenging the rates themselves, but rather the manner in which they were obtained, which she described as a “manipulation of the force-placed insurance process.”

The court said that this was “semantics.”  At bottom, the plaintiff was simply asserting that the rates were too high. Because the alleged kickbacks that the plaintiff claimed were inappropriately included were actually part of the rate approved by the insurance department, the court concluded that the filed rate doctrine barred her claims.

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