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Thursday, September 26, 2013

New York DFS Publishes New Lender-Placed Insurance Rules

As reported in the ABIA Bank Insurance Connection last week, the New York Department of Financial Services (DFS) proposed new regulations for lender-placed insurance (forced-placed insurance). On September 25, those regulations were published in the state register and are subject to a 45 day public comment period. 

New York state's lender-placed insurance regulations exceed the Consumer Financial Protection Bureau's (CFPB) rules for the product in several ways including:
  • prohibiting commissions and affiliate reinsurance arrangements;
  • specifying a minimum 62% loss ratio and triennial rate filings; and
  • prohibiting other practices, including providing free or below cost tracking services.
ABIA's outside counsels Chrys Lemon and Adam Maarec with McIntyre & Lemon, PLLC are currently reviewing the NYDFS' rules and we will provide ABIA members with a detailed summary. Please continue to watch the ABIA Bank Insurance Connection for additional information.

Read the NYDFS rules.

See the state register.