Porch Group, the parent company of Homeowners of America Insurance Company (HOA), has agreed to a US$7.1 million settlement with the Vesttoo Creditors Liquidating Trust over constructive trust claims.

This settlement is part of Porch's efforts to recover losses stemming from the Vesttoo reinsurance letter of credit (L/C) collateral fraud (DC World News, 19 July 2023), which had adversely affected HOA. ​

Related development

In a related development, Porch entered into a strategic agreement with Aon, a leading reinsurance broker, resulting in an upfront payment of approximately US$25 million to Porch, with an expected additional US$5 million over the following four years.

As part of this agreement, both parties released claims arising from the Vesttoo fraud. Porch has stated its intention to vigorously pursue recovery from non-Aon parties involved in these matters. ​

Potential cost savings

These actions underscore Porch Group's commitment to addressing the challenges posed by the Vesttoo fraud and to strengthening its financial position through strategic partnerships and settlements.

The arrangement between Porch and Aon marks the first indication that any sort of agreement, or settlement, could provide a route that avoids potentially costly litigation related to the Vesttoo L/C reinsurance fraud,

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.