New York’s financial regulator has called for hearings to probe whether insurers’ rates are too high for mortgage borrowers who lapsed on their previous residential policies.
The Department of Financial Services has told 15 financial firms, including banks, mortgage servicers and insurers, to provide testimony, according to a statement today from Superintendent Benjamin Lawsky. The first hearing is scheduled for May 17 in Manhattan.
Mortgage firms hire new insurance providers to shield against losses tied to storm damage or vandalism when borrowers fail to pay their premiums. The state review will focus on the relationships between the companies that force borrowers to take the coverage.
“We will use the information gathered at the hearings to determine whether force-placed insurance rates are justified or need correction,” Lawsky said. “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.”
Insurers including New York-based Assurant Inc., Germany’s Munich Re and Australia’s QBE Insurance Group Ltd., sell the coverage.