Smith, Tressa
Subject:
Attachments:
FW: CEJ Comments to LPI MCAS
cej_comments_lpimcas_170426.docx; cej_comments_lpimcas_170426.pdf; lpi mcas
mock up.xlsx
-------- Forwarded Message -------Subject:CEJ Comments to LPI MCAS
Date:Wed, 26 Apr 2017 11:44:34 -0400
From:Birny Birnbaum <[email protected]>
To:Ailor, Maria <[email protected]>, Angela Dingus <[email protected]>,
Mealer, Jim <[email protected]>, Brent Kabler <[email protected]>,
LeDuc, Jo A - OCI <[email protected]>, Groszos, Amy <[email protected]>,
[email protected], Chrys D. Lemon <[email protected]>
Good Morning,
Attached please find CEJ's comments related to Master Policies and
Complaints related to issues discussed in yesterday's call. I am
copying Assurant and ABA to ensure they receive the comments in time to
review prior to tomorrow's call.
In addition to the attached, we would like to weigh in on the claim
settlement bucket data element. We strongly urge the drafting group to
retain the current date blocks for two reasons. First, these date blocks
match those in the personal auto and homeowners MCAS blanks. By using
the same date blocks for claim settlement, market analysts can compare
claim settlement times for personal auto physical damage to LPI auto and
for homeowners to LPI home. We readily acknowledge there are
differences between LPI and voluntary insurance products, but the
similarities are significant and, consequently, being able to compare
across lines is an important tool for regulators.
Second, as data are reported in the LPI MCAS, it will be more apparent
if the current buckets are appropriate or not. It makes no sense to
alter the data blocks based on unaudited information provided by one LPI
insurer. We readily acknowledge that Assurant has the majority of the
LPI home market, but that is not the case for LPI auto. We would also
note that Assurant obviously counts many or most of the largest mortgage
servicers among its clients -- since that is the only way to get to
Assurant's market share. Other LPI insurers likely have a client base
comprised of many smaller lender/servicers. Consequently, it is unclear
if Assurant's experience is representative of the remainder of the LPI
home market.
Thank you for your consideration,
Birny Birnbaum
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Comments of the Center for Economic Justice
To the LPI MCAS Drafting Group
April 26, 2017
As a follow-up to yesterday’s call, CEJ submits the following comments.
Master Policies
It was a bit unclear what the group decided on master policies. While it was clear that
regulators wanted individual policies reported separately from individual certificates, some
regulators expressed interest in information on master policies. So, for the group’s
consideration, we offer the following:
Definition; Master Policy means a group or blanket policy providing coverage for the vehicles
or property serving as collateral for a portfolio of loans. Individual coverage, typically in the
form of a certificate, is issued from the Master Policy at the direction of the lender/servicer or
automatically at the point in time when the borrower’s required voluntary insurance ceases to be
in-force.
See accompanying spreadsheet for a mock up of interrogatories to include master policies.
In addition, the following data elements would be added:




Number of master policies in force at beginning of period
Number of master policies added during the period
Number of master policies canceled for any reason during the period
Number of master policies in force at end of period
We think information on master policies would be useful to regulators for market
analysis, since the number of master policies is a general indicator of the number of
lenders/servicers for whom the LPI insurer is providing coverage. The number of master
policies will not exactly equal the number of LPI clients, but will be close. Consequently,
information on master policy counts, as presented in the four data elements, would provide a
very good indicator of changes in business beyond the information provided by changes in the
number of individual policies/certificates.
Our intent is not to generate an extended discussion on this issue, but simply to seek
clarification from the drafting group.
CEJ Comments to LPI MCAS Drafting Group
April 26, 2017
Page 2
Complaints
The drafting group discussed breaking out complaints between those received from the
DOI and those received from any other person or entity: Currently, complaint coding does not
include an option for LPI or specific LPI coverages. Consequently, there is no automated
mechanism for identifying LPI claims. If and when LPI codes are added to the complaint codes,
these complaints-from-the-DOI data elements can be eliminated.
CEJ also suggests further breaking out complaints between complaints related to
insurance tracking and complaints for all other reasons: The vast majority of interaction between
a consumer and lender/servicer and LPI insurer will be related to insurance tracking, including
complaints about coverage being placed or the amount of coverage placed. Other than insurance
tracking, the borrower’s interaction with the LPI insurer will likely be limited to claim settlement
issues, since the borrower does not pay a premium to the LPI insurer, but pays a charge to the
lender/servicer. By segregating insurance tracking from all other complaints, the number of
reported complaints will not be skewed by insurance tracking complaints.
The complaint definitions for the insurance tracking complaint data elements delete the
phrase “subject to the state’s insurance laws.” While some insurance laws specifically address
insurance tracking for LPI, others do not. However, in the vast majority of lender/servicer – LPI
insurer relationships, the lender/servicer contracts out insurance tracking to the LPI insurer or
affiliate of the LPI insurer. Communication between the borrower and lender/servicer related to
required insurance, insurance tracking and LPI placement will typically be directed to the LPI
insurer as the insurance tracking contractor.
Stated differently, lenders/servicers contract out insurance tracking to the LPI insurers
who are providing the LPI. Consequently, if the definition of complaints is limited to things
subject to insurance regulation or the insurance policy, the only complaints reported may be ones
related to claims and possibly coverage, but not related to any tracking issues. Since the LPI
insurers are the ones doing the insurance tracking and some state laws specify insurance tracking
procedures, CEJ suggests separation of complaints between insurance tracking and all other
reasons.
Proposed Data Elements:
Complaint related to anything other than insurance tracking received directly from any person or
entity other than the DOI
Complaint related to anything other than insurance tracking received from the DOI
Complaint related to insurance tracking received directly from any person or entity other than the
DOI
Complaint related to insurance tracking received from the DOI
CEJ Comments to LPI MCAS Drafting Group
April 26, 2017
Page 3
Proposed Definitions
Definition: Complaint related to anything other than insurance tracking received directly
from any person or entity other than the DOI: Any written, including electronic,
communication that expresses dissatisfaction with a specific person or entity subject to
regulation under the state's insurance laws. An oral communication, which is subsequently
converted to a written form in order to be analyzed and acted upon, will meet the definition of a
complaint. Person or entity includes, but is not limited to, a borrower, policyholder, servicer or
lender. Do not include complaints related to insurance tracking in this category.
Definition: Complaint related to anything other than insurance tracking received directly
from the DOI: Any written, including electronic, communication that expresses dissatisfaction
with a specific person or entity subject to regulation under the state's insurance laws. An oral
communication, which is subsequently converted to a written form in order to be analyzed and
acted upon, will meet the definition of a complaint. Directly from the DOI means a state
department of insurance directed a complaint that the department of insurance had received to
the reporting company. Do not include complaints related to insurance tracking in this category.
Definition: Complaint related to insurance tracking received directly from any person or
entity other than the DOI. Any written, including electronic, communication that expresses
dissatisfaction with a specific person or entity related to insurance tracking only. An oral
communication, which is subsequently converted to a written form in order to be analyzed and
acted upon, will meet the definition of a complaint. Person or entity includes, but is not limited
to, a borrower, policyholder, servicer or lender. Report only complaints related to insurance
tracking in this category. Insurance tracking means all activities associated with monitoring
loans for evidence of required insurance from loan inception to the lender or servicer directing
the LPI insurer to issue LPI coverage. Insurance tracking includes, among other things, sending
of notices of to borrowers informing borrowers that evidence of required insurance is needed and
failure to provide such evidence may result in force-placement of insurance by the lender or
servicer.
Definition: Complaint related to insurance tracking received directly from the DOI.
Any written, including electronic, communication that expresses dissatisfaction with a specific
person or entity related to insurance tracking only and received directly from the department of
insurance only. An oral communication, which is subsequently converted to a written form in
order to be analyzed and acted upon, will meet the definition of a complaint. Directly from the
DOI means a state department of insurance directed a complaint that the department of insurance
had received to the reporting company. Report only complaints related to insurance tracking in
this category. Insurance tracking means all activities associated with monitoring loans for
evidence of required insurance from loan inception to the lender or servicer directing the LPI
insurer to issue LPI coverage. Insurance tracking includes, among other things, sending of
notices of to borrowers informing borrowers that evidence of required insurance is needed and
failure to provide such evidence may result in force-placement of insurance by the lender or
servicer.
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Interrogatories
If Single Interest Lender-Placed Insurance was
in force during the reporting period, enter the
percentage of all Lender-Placed Insurance
which was Single Interest
If Dual Interest Lender-Placed Insurance was
in force during the reporting period, enter the
percentage of all Lender-Placed Insurance
which was Dual Interest
Was the Company Still Actively Writing in the
State at the End of the Period (Y/N)
Has the company had a signficant
event/business strategy that would affect data
for the reporting period? If yes, please explain.
Has a block of business been sold, closed or
moved to another company during the
reporting period? If yes, please explain.
How does the company treat subsequent
supplemental payments on previosuly closed
claims (or additonal payment on a previously
reported claim)? Re-open original claim or
open new claim?
Claims Comments
Underwriting Comments
Data
Lender-Placed Auto
Master
Individual
Individual
Policies
Certificates
Policies
Lender-Placed Home Hazard
Master
Individual
Individual
Policies
Certificates
Policies
Lender-Placed Home Flood
Master
Individual
Individual
Policies
Certificates
Policies
Lender Placed Auto
Lender Placed Home Hazard Lender Placed Home Flood
LP Home Wind Only
Single Interest Dual Interest Single Interest Dual Interest Single Interest Dual Interest Single Interest Dual Interest
Lender-Placed Home Wind-Only
Master
Individual
Individual
Certificates
Policies
Policies