- April 3, 2013
- Posted by: oscis
- Category: Compliance, News
OSC Reaffirms its Commitment to Providing Transparent, Consumer-Friendly Lender-Placed Insurance to Homeowners
KENNESAW, Ga., Apr 03, 2013 (BUSINESS WIRE, The Wall Street Journal, Yahoo Finance) — The lender-placed insurance (LPI) industry has recently been affected by a series of regulatory announcements including the Federal Housing Finance Agency’s (FHFA) notice dated March 26, 2013, to investigate the commission payments and reinsurance practices of a number of major lender-placed insurers.
It is the position of OSC that the practices highlighted in the FHFA’s notice create significant conflicts of interest for a number of LPI providers, and as such warrant immediate attention from government regulators and those within the insurance industry. In contrast to the actions of many industry actors, OSC is committed to providing homeowners and clients with a LPI product that is fully transparent, price competitive and compliant with state and federal regulations. As a company policy, OSC does not engage in inappropriate payments to its customers.
“OSC supports last week’s action from the FHFA to investigate certain compensation arrangements that are prevalent in today’s LPI market,” said Tracey Carragher, CEO of Breckenridge Insurance Group, parent company of OSC. “However, we believe that it should go further. For instance, if the LPI sector were to be opened up to further competition, premiums could be better aligned with actual loss ratios and hundreds of millions of dollars per year could be saved nationwide.”
An example of this type of competitive solution was a plan accepted in November 2012 by Fannie Mae that selected an OSC/Breckenridge-led consortium as a preferred supplier for LPI products. According to independent assessments, the initiative would have offered “significant discounts” throughout the market. In February, despite support from Fannie Mae, the FHFA chose to postpone the plan’s implementation. The FHFA’s decision caused House Financial Services Committee ranking member Representative Maxine Waters (D-CA) to request that Acting FHFA Director Edward DeMarco provide rationale for the rejection of a plan with substantial projected savings to homeowners.
“The plan that was accepted by Fannie Mae was designed from the ground up to offer consumers cost effective and compliant coverage and to curb anticompetitive behaviors in the LPI market,” further offered Carragher. “Representative Waters has shown great courage in taking up this cause on behalf of American homeowners. The LPI market affects tens of millions of Americans, who deserve a competitive and transparent market. As such, we support any efforts from Congress or regulators to bring positive change to the sector.”
OSC, a specialist in insurance and risk management services and products offers a comprehensive range of portfolio protection and financial risk management services to both large and small institutions. OSC, with its parent company Breckenridge Insurance Group, augments its traditional collateral protection insurance coverage options with additional lending and insurance products.