NU Online News Service, April 10, 3:45 p.m.EST

The Consumer Financial Protection Bureau today drafted newnational regulations governing forced-place insurance.

The proposal would give consumers more rights, includingrequiring servicers to give advance notice and pricing informationbefore charging consumers for this insurance.

According to officials at the American Bankers InsuranceAssociation (ABIA), the CFPB said it will reach out to consumergroups, industry, and other agencies for feedback before theproposed rules will be released.

The formal proposal is scheduled to be issued this summer,according to Kevin McKechnie, ABIA executive director.

At the same time, New York insurance regulators announced thatthey are ramping up the pressure on insurers who provide so-called"force-placed" coverage.

First, New York is demanding a detailed accounting of theexpenses, claims payments and profits of nine insurance groups itsays are involved in the business in New York, and telling them itplans a hearing in May on the issue.

The hearing, according to Benjamin Lawsky, New Yorksuperintendent of Financial Services, will focus on whether ratesare excessive and to probe payments between insurers, brokers,agents and mortgage servicers.

DFS officials were unavailable for comment on the exact date thehearing will be held.

The probe appears to be part of New York's intensive efforts toreduce the rate of foreclosures in the state. "The high cost offorce-placed insurance adds to struggling homeowners' debt burdenand makes it even more difficult for them to avoid foreclosure,"Lawsky says.

"The high cost also harms investors in mortgages ormortgage-backed securities, because servicers advance the insurancepayments and then recoup those payments out of investment incomebefore investors are paid," he adds.

The insurers whom the department is requiring to submit datainclude Balboa Insurance Company, QBE Insurance Corporation, QBEFinancial Institution Risk Services, Inc. All of these companiesare units of QBE, an Australian company which has offices in NewYork and California.

Other insurers include American Security Insurance Company andAmerican Bankers Insurance Company of Florida, both subsidiaries ofAssurant; Meritplan Insurance Company, Irvine, Calif.; AmericanModern Home Insurance Company, Cincinnati, a unit of Munich Re;Empire Fire and Marine Insurance Company, Omaha, Neb., a unit ofZurich; and Fidelity and Deposit Company of Maryland, Schaumberg,Ill., another Zurich subsidiary.

Both Assurant subsidiaries are part of the Assurant SpecialtyProperties, based in Atlanta.