Does What Happens in New York Stay in New York?

In homeowner's insurance, Homeowners' Policy on October 4, 2013 at 1:32

The New York Department of Financial Services just proposed a new rule that impacts force placed insurers.  The rule prohibits forced place insurers from placing coverage on a property that is served by an affiliated bank.  Why is this proposal on the table?

A profit-sharing plan seems to be the reason and this proposal will forbid carriers from paying commission on the force-placed insurance, thus limiting the appearance of a “kickback culture,” according to the Superintendent of the Department.  The proposal suggested other provisions including barring payment of contingent commissions based on underwriting profitability or loss ratios.

If this proposal becomes law in NY, will it set a precedent in other states? Will it really help homeowners? Read more.


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