INSURANCE - BACK TO THE BASICS
Mortgage Bankers Association New Orleans 2009
Moderator Bob Vestewig, GEMSA Panelists Deborah Wright, Prudential Kathleen DuFraine, Zenta Jon Kemp, Wells Fargo Paul Stare, PPM Bernie Brown, Insurance Advisors
Topics
1. Overall Market Conditions 2. Catastrophic Issues 3. ACORD update 4. Due Diligence and Surveillance 5. Borrower Resistance – Lender Response 6. Questions and discussion
Overall Market Conditions
1. Availability of Coverage 2. Premiums 3. Borrower Pushback
Catastrophic Insurance Issues
Wind Flood EQ
Terrorism
ACORD Update
Current situation Future prospects
Disclaimer Text
• 2003/10:
THIS IS EVIDENCE THAT INSURANCE AS IDENTIFIED BELOW HAS BEEN ISSUED, IS IN FORCE, AND CONVEYS ALL THE RIGHTS AND PRIVILEGES AFFORDED UNDER THE POLICY.
•
2006/07:
THIS EVIDENCE OF COMMERCIAL PROPERTY INSURANCE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE ADDITIONAL INTEREST NAMED BELOW. THIS EVIDENCE OF COMMERCIAL PROPERTY INSURANCE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS EVIDENCE OF PROPERTY INSURANCE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
Cancellation Text
• 2003/10:
THE POLICY IS SUBJECT TO THE PREMIUMS, FORMS, AND RULES IN EFFECT FOR EACH POLICY PERIOD. SHOULD THE POLICY BE TERMINATED, THE COMPANY WILL GIVE THE ADDITIONAL INTEREST IDENTIFIED BELOW ___ DAYS WRITTEN NOTICE, AND WILL SEND NOTIFICATION OF ANY CHANGES TO THE POLICY THAT WOULD AFFECT THAT INTEREST, IN ACCORDANCE WITH THE POLICY PROVISIONS OR AS REQUIRED BY LAW.
•
2006/07:
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL ___ DAYS WRITTEN NOTICE TO THE ADDITIONAL INTEREST NAMED BELOW, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR REPRESENTATIVES.
Due Diligence and Surveillance
Carrier quality Vacancy issues Force place
Borrower Resistance – Lender Response
1. 2. 3. Increased premiums Declining revenue Resistance to purchasing more insurance
4.
5.
General non-compliance
Lender/servicer responses
- concessions
- defaults
Questions and Discussion