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The National Association of Insurance Commissioners will hold a public hearing Thursday, Aug. 9, 2012, to further discuss the use of lender-placed insurance and the effect of the practice on consumers...
WASHINGTON, June 27 -- The National Association of Insurance Commissioners issued the following news release:
The National Association of Insurance Commissioners (NAIC) will hold a public hearing Thursday, Aug. 9, 2012, to further discuss the use of lender-placed insurance and the effect of the practice on consumers. The hearing at the NAIC Summer National Meeting in Atlanta will be co-hosted by the Property and Casualty Insurance and the Market Regulation and Consumer Affairs Committees.
Lender-placed insurance is imposed by a bank or mortgage servicer on a home when a mortgage holder fails to maintain required insurance. Recent discussion has focused on the rates charged for lender-placed policies and the possible harm this type of insurance may do to consumers.
"This hearing will give regulators the chance to hear from consumers, the industry and financial institutions about the use of these types of homeowners policies," said Mike Chaney, Chair of the Property and Casualty Insurance Committee and Mississippi Insurance Commissioner. "We recognize the importance of protecting lender collateral, but not at the expense of the consumer's bank account."
The hearing will focus on the use of lender-placed insurance, how consumers are affected by the practice, and expected to probe the following issues:
* The process for lender-placed property insurance and its impact on homeowners, including a review of the relationships between lenders/mortgage servicers and insurers;
* Whether coverage is being imposed on consumers retroactively;
* Disclosures used to inform consumers about lender-placed property insurance;
* Coverages provided by lender-placed insurance; and
* Premiums charged, loss ratios, and related rating and pricing information.
"We want to know more about rates, consumer disclosures and how the relationships many of the insurers have with the lenders affects the transactions," said Sharon P. Clark, Chair of the Market Regulation and Consumer Affairs Committee and Kentucky Insurance Commissioner.
An agenda for the public hearing will be posted to the committee Web pages at www.NAIC.org when it is finalized.
View table at http://www.naic.org/Releases/2012_docs/insurance_regulators_hold_hearing_lender_placed_insurance.htm.
View the public hearing notice here (http://www.naic.org/documents/committees_c_120809_public_hearing_lender_placed_insurance.pdf).
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