(Pearl River, NY) November 3, 2003 -The Association for Cooperative Operations Research and Development (ACORD) and the Mortgage Bankers Association (MBA) announced the finalization and release of ACORD Form 28, Evidence of Commercial Property Insurance, a new standard form that meets the specific needs of the commercial mortgage and the insurance industries.
ACORD and MBA worked together to develop ACORD Form 28. The resulting form will be a welcome addition to ACORD’s existing library of more than 500 standardized forms. Specifically, some of the additions to ACORD Form 28 include references to terrorism insurance, business interruption insurance and mold coverage. The new ACORD Form 28 is expected to have immediate and widespread use throughout the US insurance and mortgage industries.
“Working with our partner ACORD, as well as our various stakeholders, MBA is proud of this launch as it is a perfect example of improved document transparency that will eliminate confusion over certain kinds of coverage and increase the confidence of our lenders, investors and servicers,” stated Diana Reid, chair of the MBA Insurance Certificate Working Group, managing partner, Beekman Advisors, LLC.
MBA’s Insurance Task Force of the Commercial Real Estate/Multifamily Finance Board of Governors (COMBOG) determined that there was a need for a specific documentation form for commercial and multifamily properties in order to identify unique terms covered in those property types. MBA representatives met with the Council of Insurance Agents and Brokers (CIAB) to begin a dialogue on refining the process, timeliness and accuracy of commercial insurance information provided to the commercial real estate finance industry. MBA and its constituents created a draft form, which was submitted for review by the ACORD Standards Program members and Forms Pool members. After thoroughly addressing responses and feedback, ACORD and MBA were able to finalize the new form and prepare for distribution to both the insurance and finance industries.
“Our members, the major brokers who place 80 percent of all commercial premiums, are strong advocates of greater consistency and transparency in the national commercial insurance market. ACORD Form 28 is a giant step in the right direction,” says Ken A. Crerar, president of The Council of Insurance Agents and Brokers, “and an important new tool for our members. The speed with which this project has been completed is remarkable and a testament to cooperation within our industry.”
The importance and need for this form throughout the insurance and mortgage industries was made apparent by the influence and participation of a variety of organizations in both industries. It was a cooperative effort spearheaded by ACORD and MBA. “ACORD Form 28 is a much needed solution for the timely and accurate recording of evidence of commercial property insurance,” stated Kathleen Dufraine, vice president of risk management and CPCU, GMAC Commercial Mortgage Corporation.
Until now, there was no form available exclusively to the commercial real estate industry to document evidence of commercial insurance. The standard form available to document personal property insurance information to mortgagees and other lenders was the widely accepted ACORD Form 27, Evidence of Property Insurance. ACORD Form 27 will still be used to document personal property insurance since the type of coverage listed is relatively uniform and few specific details are required-and will be renamed, ACORD Form 27, Evidence of Personal Property Insurance.
The Co-Chairs of the NAIC Terrorism Insurance Implementation Working Group, Therese M. Vaughan, commissioner of insurance, State of Iowa, and Gary Steuck, director of insurance, State of South Dakota, offered their support to ACORD 28 stating that the “The new form clearly provides helpful coverage information in an easily understandable format. The NAIC is please that the insurance industry and the mortgage bankers were able to work together on a solution, avoiding the need for regulatory involvement. This is a good example of private section collaboration that works well for everyone.”
ACORD provides detailed field-by-field instructions through its Forms Instruction Guide to ensure the form is used properly and to eliminate questions or problems. This facilitates its use and acceptance.
John Van Osdall, senior vice president of USI Insurance and ACORD board member summarized the process that he supported throughout its development: “as soon as TRIA became law, members of the insurance and mortgage industries quickly asked for an industry standard to evidence the specifics of the Terrorism insurance coverage being provided. With a real sense of urgency and an understanding of the complex issues, ACORD and MBA worked together with all stakeholders of the financial services industry to evaluate and satisfy their needs. In record time ACORD Form 28 was created, approved and is now being introduced in the marketplace. It is an excellent example the collaborative work environment ACORD is organized to provide. My hat is off to the working parties that have made this possible.”
About ACORD: Based in New York, ACORD (Association for Cooperative Operations Research and Development) is a global, nonprofit insurance association whose mission is to facilitate the development and use of standards for the insurance, reinsurance and related financial services industries. With offices in London as well, ACORD accomplishes its mission by remaining an objective, independent advocate for sharing information among diverse platforms. ACORD Standards and services improve efficiency and expand market reach. Affiliated with ACORD are hundreds of insurance and reinsurance companies, and thousands of agents and brokers, related financial services organizations, software providers, and industry organizations worldwide. For additional information, visit ACORD’s Web site: www.acord.org.
About MBA: MBA is the national association representing the real estate finance industry. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership prospects through increased affordability; and to extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters excellence and technical know-how among real estate finance professionals through a wide range of educational programs and technical publications. Its membership of approximately 2,700 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, life insurance companies and others in the mortgage lending field. For additional information, visit MBA’s Web site: www.mortgagebankers.org.