April 26, 2012
Contact: David Neustadt 212-709-1691
DEPARTMENT OF FINANCIAL SERVICES TO HOLD PUBLIC HEARINGS ON FORCE-PLACED INSURANCE
Force-Placed Insurance Industry Participants and Other Interested Parties To Testify
Hearings in New York City to Begin May 17 and likely to last several days
Homeowners invited to detail their experiences with force-placed insurance via the Department's Website
Benjamin M. Lawsky, Superintendent of the Department of Financial Services, today announced that public hearings will begin on May 17, 2012 in New York City to review whether rates for force-placed insurance are appropriate or excessive and to examine the relationships between and payments to and from insurers, banks, mortgage servicers and insurance agents and brokers.
The New York State Department of Financial Services will conduct the hearings from 10 a.m. to 5 p.m. beginning on Thursday, May 17. The hearings will likely continue on May 18 and May 21. The hearings will be held in the Neil Levin Hearing Room on the 5th floor of the Department’s offices at 25 Beaver Street in Manhattan. The hearings will be webcast.
The public hearings relate to a Department investigation into whether homeowners and investors in mortgage-backed securities are harmed by high premium charges when banks and servicers "force-place" insurance on the properties they service. This occurs when homeowners' own property insurance may have lapsed or where the bank deems the homeowners' insurance insufficient.
The Department has already sent letters to 15 financial services companies directing them to provide written and oral testimony and answer the Department's questions. The companies include banks, mortgage servicers, insurance agents and brokers, insurers and reinsurers.
"The object of these hearings will be to probe all the inner workings of this important industry and examine its impact on homeowners and investors. We will use the information gathered at the hearings to determine whether force-placed insurance rates are justified or need correction. We are looking into all aspects of this industry, and will take whatever action is necessary to root out any misconduct and to make sure that homeowners and investors are treated fairly," Superintendent Lawsky said.
In addition to financial services companies, testimony will be presented by housing advocates, expert witnesses, homeowners and other interested parties.
The Department began looking into force-placed insurance in October, 2011 when it uncovered evidence of potentially problematic and abusive practices in the industry occurring at the expense of homeowners and investors.
Homeowners and others who wish to share their experiences with force-placed insurance with the Department and the public can tell their story at: http://www.dfs.ny.gov/consumer/csb_tellyourstory.htm. The Department plans to consider some of these stories at the hearings.