The commercial real estate finance industry is facing substantial challenges due to climate change, particularly with respect to extreme flooding. As flood events continue to occur more frequently and with greater severity across the US, the role of the Federal Emergency Management Agency (FEMA)—and its administration of the National Flood Insurance Program (NFIP) and

orange theodolite prism lies on a background of geodetic maps of the areaFor those of you who read our commentary regularly, you’ll see that we span the commentariat world from musings of perhaps little practical utility but great import (at least to us) to the more mundane.  Today, mundane. Let’s talk title policies and survey standards.  There’s good news here and often good news doesn’t travel fast enough, so here we go.

Title policies “insure over” information that a survey would discern.  It’s precious little good to have a title policy yet find out there’s a missile silo just behind the setback line owned by the US Government.  So title companies require a survey and will generally insure over any nasty surprises the survey would have uncovered.
Continue Reading Seeing is Believing: ALTA’s New Survey Standards

The Dodd-Frank Act was a cornucopia of opportunity for rule writers. To the regulatory community, this was almost a bottomless candy jar. And so our regulatory apparatchiki began to beaver away and produced, to date, something like 22,000 pages of rules which purport to moderate or prevent bad behavior by all those nasty institutions perceived to have some responsibility for the financial crisis of 2008. Curiously, at least, to me, Dodd-Frank included in among its bad boys, those institutions “significantly engaged in insurance activities.” Apparently, our Congressional grandees in the overheated environment of the Great Recession conflated insurance and banking. Hey, they are kind of like financial institutions, and they’re big, or at least some of them are, and are probably filing with nefarious types inclined to go off the reservation and therefore in need of “guidance” from the regulatory community.
Continue Reading Dodd-Frank Rulemaking Developments by the Fed for Fed-Supervised Insurance Firms

libertyTRIA is back.

On November 26, 2002, in the wake of the September 11th attacks, President Bush signed the Terrorism Risk Insurance Act of 2002 (TRIA), and with it, breathed life into a new player in the catastrophic event insurance market: the government.

TRIA created a terrorism risk insurance program (TRIP) of dual back-scratching: the insurer was required to make available terrorism insurance, and the federal government committed itself to taking the cataclysmic risks off the table. The law created a temporary federal program that provided for shared public and private compensation for certain insured losses resulting from a certified act of terror.  The Terrorism Risk Insurance Extension Act of 2005 (TRIEA) extended TRIP through December 31, 2007, and the Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA 2007) further extended TRIP through December 31, 2014.
Continue Reading The New Terrorism Risk Insurance: Still a Cost of Doing Business