The state intends to implement some sizable and widespread regulations to this practice.
Officials from New York have just proposed a new comprehensive list of rules in order to reform the practices of force placed insurance (also known as lender placed or creditor placed), for the industry within that state.
These regulations are meant to help to make sure that the procedures will be kept free of abuse.
This Department of Financial Services (DFS) in New York has stated that the regulations for force placed insurance are being designed in order to protect homeowners from being abused. In this way, it will remove the industry’s ability to accept kickbacks, which have been a considerable contributor to sending premiums skyward. The goal is to save taxpayers, homeowners, and investors millions of dollars every year as this sector moves ahead with lower rates than those that have been used over the last several years.
The proposed force placed insurance regulations are the result of a massive investigation in New York.
After conducting this probe, the DFS has already come to an agreement with the largest force placed insurance companies that do business within the state, earlier this year. Among the insurers who are involved in this agreement are QBE, Assurant, and others. The agreement involves the implementation of reforms and to provide compensations.
The officials have stated that the new regulations from the DFS will be helpful in making certain that the changes will apply to the force placed insurance while moving forward, even as new insurers make their way into the state to do business.
According to Andrew Cuomo, the governor of the state, said that “Two years ago, my administration launched an investigation of the force-placed insurance industry that revealed widespread abuses of consumers by banks and mortgage companies.” As he announced the proposal for the changes in regulations, he added that “Today we are taking a major step in righting this injustice and reforming the industry by proposing tough new regulations to protect homeowners. Insurers should be on notice that New York State is going to continue rooting out abuse in the industry and protecting taxpayers.”