The proposed pact, filed Monday with the U.S. District Court in Miami, would resolve a lawsuit filed in April 2011 that contends the companies overcharged roughly 24,400 borrowers whose policies had lapsed on premiums for backup policies.
Under the terms of the settlement, Wells Fargo and QBE would refund 25% of amounts paid by borrowers or credit that amount to borrowers who have been billed but not yet paid. QBE and Wells Fargo also have taken steps to change their business practices that plaintiffs say will result in more competitively priced premiums throughout the state, according to court papers.
A lawyer for the homeowners did not respond immediately to a request for comment.
Wells Fargo spokesman Jim Hines said in an email the company is “pleased that we were able to resolve this particular matter.”
“We continue to support programs like our lender-placed insurance services, which provide continuous hazard insurance protection for real property owned by our customers,” he added.
Paula Symons, a spokeswoman for QBE, said in an email the company “elected to settle the matter to avoid costly litigation and the need for continuing management attention to this proceeding.”