Wednesday, September 25, 2013

New York Governor Andrew Cuomo proposing reforms for New York's force-placed insurance industry

By Hugh Moore in 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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