This seems to be insurance week for me. Later this week, I’ll jump into a recent court case that recently hit the headlines. Today, however, I received an e-mail warning of the POSSIBLE unauthorized issuance of property insurance polices by “an unathorized third party purporting to represent the insurers listed below and not to policies properly issued by the insurers or their authorized representatives . . . (emphasis added by me) :
- North American Specialty Insurance Company
- North American Capacity Insurance Company
- AIX Specialty Insurance Company
Again, the problem is not the policies propertly issued by these companies. The alert or focus is on POSSIBLE unathorized policies hitting the market. If NOT properly issued, then the insurance just goes – So, what is lender or servicer to do? When you receive an acceptable certificate of insurance (more on that topic tomorrow), or when you receive the policy itself, consider taking these steps:
- Verify: receive written confirmation that it was issued by an authorized employee of the insurance company (and not the broker or agent)
- Reputable Brokers & Agents: deal only with reputable brokers and agents (but even then, evaluate the merits of my first bullet point)
Questions: Do you have other suggestions or choices for us? What are other ways to protect against this type of fraud? What steps should you take in order to comply with Company policy, regulatory requirements, rating agency requirements or contractual standards of care? Please post your comments below.