NY Issues New Force-Placed Insurance Rules
On September 19, National Mortgage News published an article titled New York Issues New Force-Placed Insurance Rules.
New York Issues New Force-Placed Insurance Rules
The New York State Department of Financial Services has proposed new regulations further extending the settlements it made with several of issuers of force-placed insurance. It said these new regulations will help ensure that the terms of those settlements will apply to the industry moving ahead even if new insurers enter the market.
Benjamin M. Lawsky, Superintendent of Financial Services said, “Our investigation uncovered a kickback culture in this industry that inflated premiums and did serious damage to struggling homeowners. These new rules will help ensure that homeowners remain protected and force-placed insurers don’t simply slide back to the bad old practices of the past.”
Among other conditions, the new rules will prohibit force-placed insurers from issuing a policy on mortgaged property serviced by a bank or servicer affiliated with the insurers.
They cannot pay commission to those entities nor reinsure policies affiliated with those entities.
And the rule would bar force-placed insurers from paying contingent commissions based on underwriting profitability or loss ratios.
To view the online article, please click here.
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders, and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally. Website: www.safeguardproperties.com.