By Hugh Moore in DSNews.com on 9-24-2013
" The reforms come in the wake of an investigation that found numerous
instances of abuse among lenders and force-placed insurance providers. . . .Forced-placed insurance, which is insurance that a lien holder places on
a property to cover a lapse of mortgage insurance, has drawn particular
scrutiny from regulators because it has proven relatively easy to
abuse. . . .
The New York Department of Financial Services (DFS)
began its investigation of the force-placed insurance business in 2011.
It found that force-placed insurance can be two to ten more times
expensive than voluntary insurance, despite offering far less
protection.
“Our investigation uncovered a kickback culture in this industry
that inflated premiums and did serious damage to struggling homeowners,”
said Benjamin Lawsky, superintendent of DFS.
“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.”"
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