New York’s financial regulators will hold hearings on the so-called force-placed insurance next month. These hearings will be open to the public and will also be webcast over the Internet.
Benjamin Lawsky, superintendent of the New York Department of Financial Services, said his agency will conduct the public 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. They will be held in the Neil Levin Hearing Room on the 5th floor of the department’s offices at 25 Beaver Street in Manhattan.
Homeowners and others who wish to share their experiences involving force-placed insurance with the department and the public can tell their story at: www.dfs.ny.gov/consumer/csb_tellyourstory.htm. The department said it plans to consider some of these stories at the hearings.
At these public hearings, regulators will review whether rates for force-placed insurance are appropriate or excessive. They will also examine the relationships between and payments to and from insurers, banks, mortgage servicers and insurance agents and brokers.
The 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,” Lawsky said.
“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.”
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.