QBE Completes Balboa Deal

Sydney, Australia-based QBE Insurance Group Limited completed its $700 million acquisition of forced-placed insurance provider Balboa Insurance Group from Bank of America.

In addition to acquiring Balboa's employees, systems and client relationships, QBE agreed to assume $1.2 billion of insurance liabilities. First announced in early February, the deal also includes a long-term distribution agreement with Bank of America for lender placed and voluntary homeowners, contents, motor and other related consumer lines and associated services.

"The acquisition supports QBE's commitment to growing the business through product diversification and new distribution channels," says QBE the Americas Chief Executive Officer John Rumpler. "It also complements our current book of business and our high level of customer service."

Forced-placed insurance, a variant of homeowner insurance for foreclosed homes, has become controversial in light of the mortgage crisis.  In May, a class action lawsuit was filed against Bank of America and Balboa Insurance Company in U.S. District Court in the Central District of California alleging that Bank of America routinely backdated policies on borrowers with lapsed payment histories, forcing them further underwater on their mortgages.