My New Markets

April 23, 2007

Tax Credit, Historic, Commercial Real Estate

Nuts & Bolts: Lexington Insurance Company introduced Historic Rehabilitation Tax Credit (HRTC) Insurance to help protect owners and developers of commercial properties qualifying for federal rehabilitation tax credit against a financial loss if during rehabilitation or after occupancy the property suffers significant damage from an insured event and such damage results in a reduction in, or recapture of, the tax credit. Entities that rehabilitate and use historic structures or buildings constructed prior to 1936 for commercial purposes may qualify for significant federal tax credits under Internal Revenue Code Section 47. Large corporations and other businesses with substantial tax liabilities invest in these properties, typically in a limited partnership arrangement with the property developer, in order to achieve these tax credits. Financial exposure through the loss or reduction of the tax credit arises if the property is damaged significantly and as a result, its historical significance diminished. This exposure is typically assumed by the developer as part of the limited partnership agreement at the onset of the venture. HRTC insurance is designed to help protect owners, developers and tax credit investors against the loss of the rehabilitation tax credit during the full duration of the exposure, through rehabilitation and the first five years of occupancy.

Dollars: Up to $40 million.

Carrier: Lexington Insurance Group rated “A++” by A.M. Best. Non-admitted.

States: All.

Contact: Ed Mazman at 617-443-4660 or e-mail Edward.mazman@aig.com.

School Violent Acts Policy

Nuts & Bolts: Genesis Underwriting Management Co. has developed a first party insurance policy to fund many of the elements of a school’s emergency response plan after violent acts. Typical covered expenses include post crises management services; post incident crises intervention and containment; media, public relations and communications costs; security and civil authority expenses; air travel and hotel costs for the parents, spouse or child of a victim to the location where the school violent act occurred; as well as a limited amount for property or equipment that relates directly to the security of the school and which may assist in the mitigation or prevention of future acts.

Dollars: Up to $250,000. Minimum deductible is $2,500.

Carrier: Genesis Indemnity Co. rated “A++” by A.M. Best. Non-admitted.

States: All except New Hampshire and North Dakota.

Contacts: East of Mississippi, Matt Meyer at 859-245-2500 or e-mail matt_meyer@rpsnis.com; west of the Mississippi, Nancy Gelis at 800-275-6472 or e-mail nancy_gelis@rpsnis.com.

Earthquake, Flood Difference in Conditions

Nuts & Bolts: AmWins Insurance Brokerage of California is offering Difference in Conditions or stand alone coverage; stand alone Zone A flood. No age, construction or parking limitations. Quick turn around.

Limits: $1million to $500 million.

Carrier: Rated “A” by A.M. Best. Admitted and non-admitted.

States: All.

Contact: L-Tanya Mabrie at 818-772-3823 or e-mail Tanya.mabrie@amwins.com.

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From This Issue

Insurance Journal Magazine April 23, 2007
April 23, 2007
Insurance Journal Magazine

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