Bank's mortgage insurance venture raises questions of OCC authority

Article Abstract:

Banc One Corp. has put up an unusual reinsurance subsidiary that would take as much as 75% of the risk on private mortgage insurance policies. This means that the bank will not only assume the bigger share of insurance risk on mortgages but would also pay claims beginning with the first dollar of losses. The bank's mortgage insurance venture raises questions of the Office of the Comptroller of the Currency's (OCC) authority in granting such plan. OCC maintains that the approval of the reinsurance operation is an activity that is incidental to banking business.

Direct Property and Casualty Insurance Carriers, Surety insurance, Commercial Mortgage Insurance, Banking industry, Services, Banc One Corp., Mortgage insurance

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An accelerated recovery?

Article Abstract:

Low interest rates, low prices and capital rationalization will continue to plague life, health, property, casualty and reinsurance companies in 1993. Life insurers will bear the added burden of problematic real estate mortgages. Property/casualty reinsurance rates will increase as much as 15% as underwriters withdraw from this arena. The trend toward mergers, acquisitions, sales of books of business and blind pools will increase, as will the use of financial reinsurance to offset low pricing.

INSURANCE CARRIERS, Economic aspects, Insurance industry

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