New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter IX - Unfair Trade Practices
Part 227 - Regulation of Force-placed Insurance
Section 227.1 - Definitions

Universal Citation: 11 NY Comp Codes Rules and Regs ยง 227.1

Current through Register Vol. 46, No. 39, September 25, 2024

For the purpose of this Part:

(a) Actual loss ratio means the sum of paid losses and loss reserves, as a percentage of earned premiums.

(b) Affiliate means any company that controls, is controlled by, or is under common control with an insurer or insurance producer.

(c) Clearly and conspicuously means that the statement, representation or term being disclosed is of such size, color, and contrast and is so presented as to be readily noticed and understood by the person to whom it is being disclosed.

(d) Force-placed insurance means hazard insurance obtained by a servicer on behalf of the owner or assignee of a mortgage loan that insures the residential real property securing such loan. The term force-placed insurance shall not include hazard insurance:

(1) to protect against flood loss obtained by a servicer as required by the Flood Disaster Protection Act of 1973, 42 U.S.C. § 4001 et. seq.,* except as provided in section 227.6 of this Part;

(2) obtained by a borrower but renewed by the borrower's servicer as described in 12 C.F.R. sections 1024.17(k)(1), (2), or (5);**or

(3) obtained by a borrower but renewed by the borrower's servicer at its discretion, if the borrower agrees.

(e) Hazard insurance means insurance on the residential real property securing a mortgage loan that protects residential real property against losses caused by fire, wind, flood, earthquake, theft, falling objects, freezing, and other similar hazards for which the owner or assignee of such loan requires insurance.

(f)

(1) Insurance tracking means all activities related to determining whether a borrower has in place hazard insurance that complies with the mortgage loan contract's requirements to maintain hazard insurance, including:
(i) developing and maintaining a database used by a servicer to track required hazard insurance on borrowers' loans;

(ii) maintaining hazard insurance information on behalf of a servicer, including in a servicer's mortgage servicing system;

(iii) inputting insurance information on new loans into an insurance tracking database or a servicer's mortgage servicing system;

(iv) all communications by a servicer or on behalf of a servicer with a borrower's voluntary hazard insurer or voluntary hazard insurance producer;

(v) all communications by a servicer or on behalf of a servicer with a borrower concerning required hazard insurance, including the written notices required by section 227.2 of this Part and communications concerning charging the borrower's account for insurance; and

(vi) all call center and other customer service operations related to the communications described in subparagraphs (1)(iv) and (1)(v) of this paragraph.

(2) The term insurance tracking shall not include:
(i) issuing force-placed insurance or monitoring the continuing need for force-placed insurance after (a) voluntary hazard insurance covering residential real property has lapsed or been cancelled, or (b) an insurer, insurance producer or affiliate has not received evidence of existing insurance coverage that complies with section 227.4 of this Part; or

(ii) performing administrative services associated with cancelling force-placed insurance on properties on which force-placed insurance is not required.

(g) Insurer means an authorized insurer.

(h) Insurance producer means a licensed insurance producer.

(i) Loss reserves means the sum of case reserves and incurred but not reported losses.

(j) Mortgage loan means a loan made primarily for personal, family or household use, secured by either a mortgage or deed of trust on residential real property in this state, any certificate of stock or other evidence of ownership in, and proprietary lease from, a corporation or partnership formed for the purpose of cooperative ownership of residential real property in this state, or a loan secured by a security interest on a manufactured home in this state as defined in Uniform Commercial Code section 9-102(53) or mobile home in this state which contains one to four family housing units.

(k) Real estate owned property means residential real property that is owned by a lender after the property is not sold at a foreclosure auction.

(l) Residential real property means real property located in this state used or occupied, or intended to be used or occupied, predominantly for residential purposes and which consists of not more than four dwelling units, other than hotels and motels.

(m) Servicer means a person or entity engaging in the servicing of mortgage loans in this state, whether or not such person or entity is registered or required to be registered pursuant to paragraph (b-1) of subdivision two of section 590 of the Banking Law.

* 42 United States Code sections 4001 - 4129 (revised January 3, 2012), published by U.S. Government Printing Office, Washington, D.C. 20401. Copies of such documents are available for inspection at the offices of the Department of Financial Services at One State Street, New York, NY 10004.

**12 Code of Federal Regulations sections 1024.17(k)(1), 1024.17(k)(2), and 1024.17(k)(5) (revised February14, 2013), published in Federal Register Vol. 78, No. 31, February 14, 2013. Copies of such documents are available for inspection at the offices of the Department of Financial Services at One State Street, New York, NY 10004.

Disclaimer: These regulations may not be the most recent version. New York may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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