Mortgage Guaranty Insurance Expertise

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My expertise as to mortgage guaranty insurance and related policies and the regulations of such policies and related insured and insurer obligations and responsibilities in general can be summarized as follows, as read together with my Curriculum Vitae.

A. Regulatory Background as to Mortgage Guaranty Insurance. My expertise as to mortgage guaranty insurance can be found as follows: I am a former Commissioner of Insurance (Iowa), First Deputy Commissioner of Insurance and Assistant Attorney General assigned on a full time basis to the Department of Insurance (Iowa). In those capacities, on a daily basis, I had full regulatory oversight and responsibility for and I dealt directly with mortgage guaranty insurers and their policies and their obligations to insureds and their good faith duties and their relationship with their insureds particularly as to matters of policies and claims and premiums.

Mortgage insurance (also known as mortgage guarantee) is an insurance policy which compensates lenders for losses due to the default of a mortgage loan.

Because the insurance business is conducted across state lines and more specifically, nationally, the Insurance Codes and Department of Insurance rules and regulations (by whatever name) are substantially similar state over state. This is so because much of insurance regulation, though conducted primarily at the state level, is a result of adoption of national model statutes and administrative regulations as promulgated by the nation’s Insurance Commissioners through the National Association of Insurance Commissioners. By way of example, the Unfair Claims Practices Act is substantially similar throughout the U.S. because it is based on the NAIC Model Act, the statutory equivalent as to which I enforced in Iowa. My point is that my regulatory experience is substantially similar to parallel experience and positions in similar state Departments of Insurance operations throughout the U.S.

B. Beyond Regulation: Additional Background as to Mortgage guaranty Insurance. In addition to my regulatory background, I have served or am serving in the following capacities, each of which included daily knowledge of and interaction with mortgage guaranty insurers and their obligations and responsibilities:

  • General Counsel and Chief Lobbyist for the American Academy of Actuaries;
  • Chief of Staff at the U.S. House of Representatives;
  • President and Chief Executive Officer of the National Council on Compensation Insurance (“NCCI”), a major U.S. property casualty insurance entity doing business in some 40 states and domiciled in in Florida;
  • Elected Member of the Florida House of Representatives (currently) where I serve as a Member of the Insurance Committee (among other committees), which has legislative oversight over all insurance operations in the state (as administered by the Florida Office of Insurance Regulation) including those relating to mortgage guaranty insurance and related claims; in addition, I serve as well as a Member and Vice Chairman of the Civil Justice Committee which routinely considers legislation with significant insurance impact;
  • Nationally certified Reinsurance Arbitrator (ARIAS-US), where I sit as an arbitrator on disputes between (among others) mortgage guaranty insurers and their reinsurers; and
  • Attorney admitted to practice in Florida, Illinois and Iowa with an insurance practice and (vii) past Member of the Executive Committee of the National Association of Insurance Commissioners (“NAIC”).

Given all of this, set out below is my background specific as to mortgage guaranty insurance and related insurer claim settlement obligations and responsibilities. Specific expertise as to mortgage guaranty insurance can be summarized as follows:

1. Expertise as to Mortgage Guaranty Insurance Policies.

A. Mortgage Guaranty Insurance Policy Expertise as an Insurance Regulator. I have had extensive and substantive experience relating directly to mortgage guaranty insurance policies (like those forms often at issue) including interpreting policy language and determining the insurer’s obligations under such policies. As a regulator for eight years in three positions ((i) Assistant Attorney General assigned to the Department of Insurance (Iowa), (ii) First Deputy Commissioner of Insurance and (iii) Commissioner of Insurance), along with my staff, I approved (or disapproved) of the language of mortgage guaranty insurance policies used by each of the 1,000 property casualty insurance companies doing business in the state, (many but not all property casualty insurers sold mortgage-related insurance) including the type of policies often at issue in litigation. This regulatory action also included the approval of policy application forms like that often at issue in litigation. In addition, I regularly served as an Administrative Law Judge (then known as a “Hearing Officer”) in matters relating directly to mortgage guaranty insurance policies.

B. Mortgage Guaranty Insurance Policy Expertise: NAIC. While Commissioner, I also served as a member of the National Association of Insurance Commissioners (“NAIC”), (including membership on its Executive Committee), the nationwide organization of all state insurance commissioners. That organization has responsibilities for establishing model insurance administrative regulations and model statutes for consideration by all of the states. While with the NAIC, I served among others as a Member of the Executive Committee, which had oversight over all NAIC committees, including those Committees with mortgage guaranty responsibilities.

NAIC: Mortgage Guaranty Insurance. The mission of the NAIC Executive (EX) Committee is to manage the affairs of the NAIC in a manner consistent with the Articles of Incorporation and Bylaws as follows:

  1. Based on input of the membership, identify goals and priorities of the organization and make recommendations to achieve such goals and priorities;
  2. Create/terminate task force(s) and/or executive working groups to address special issues and monitor the work of these groups;
  3. Submit reports and recommendations to NAIC members concerning the activities of its subcommittee and the standing committees;
  4. Consider requests from NAIC members for friend-of-the-court briefs;
  5. Establish and allocate functions and responsibilities to be performed by each zone;
  6. Pursuant to the Bylaws, oversee the NAIC offices to assist the organization and the individual members in achieving the goals of the organization;
  7. Conduct strategic planning on an ongoing basis;
  8. Plan, implement and coordinate communications and activities with the Federal Insurance Office (FIO);
  9. Plan, implement and coordinate communications and activities with other state, federal, local, and international government organizations to advance the goals of the NAIC and promote understanding of state insurance regulation; and
  10. Review and approve requests for development of model laws. Coordinate review of existing model laws.

NAIC: Mortgage Guaranty Insurance Continued. Included in the responsibilities of the Executive Committee, is the management of the NAIC Property and Casualty Insurance Committee (the so-called “C” Committee) whose duties include that of the mortgage guaranty marketplace and its insurers and products. The mission of the Property and Casualty Insurance (C) Committee is to monitor and respond to problems associated with the products, delivery and cost in the property/casualty insurance market and the surplus lines market as they operate with respect to individual persons and businesses. The Committee also is to monitor and respond to problems associated with financial reporting matters for property/casualty insurers that are of interest to regulatory actuaries and analysts and to monitor and respond to problems associated with the financial aspects of the surplus lines market.

C. Mortgage Guaranty Insurance Policy Expertise: American Academy of Actuaries. Along these same lines, I served as general counsel and chief lobbyist to the American Academy of Actuaries, Washington D.C. The Academy is the national professional association for actuaries. These professionals establish premium levels for policies such as policy forms often at issue in litigation. In addition, because policy language dictates premium levels, actuaries are also active in determining policy language.

D. Mortgage Guaranty Insurance Policy Expertise: CEO of A Major US Insurance Entity. After serving as a regulator, I served as President and Chief Executive Officer for the National Council on Compensation Insurance (“NCCI”), New York City, a nationwide industry owned organization with about 1,500 employees with annual revenues of about $150 million that did (and does) business in about 40 states. NCCI was domiciled in Florida and did business throughout the U.S.

This means while CEO, NCCI was subject to the full authority of the Florida Office of Insurance Regulation (“FL OIR”) and subject as well to the Florida Insurance Code as well as the jurisdiction of all of Florida’s state and federal courts and importantly the Insurance Codes and state Departments of Insurance and courts of most all of the states.

Among my responsibilities at NCCI was (together with my staff) to formulate all workers compensation insurance policy forms as used in our 40 states of operation. This work included drafting all policy language (tailored to the specific state’s insurance code) as well as drafting all endorsements and all other policy forms. In addition, my responsibilities included gaining state insurance department approval of all such policy forms as a condition precedent to their use as submitted by some 600 insurance companies. I am very familiar with the meaning and relevance of specific state approval of policy forms, endorsements and applications and related documents and matters.

E. Mortgage Guaranty Insurance Policy Expertise: Reinsurance Arbitrator. I am also one of about 400+ certified reinsurance arbitrators (by ARIAS-US) and have sat as an arbitrator on mortgage guaranty insurance issues in disputes about policy language between reinsurers and their insurers.

2. Claims: Expertise as to Duties of Mortgage Guaranty Insurance Companies.

A. Claims: Expertise as to Duties of Mortgage Guaranty Insurance Companies As Commissioner of Insurance. I have also had significant experience and responsibility in connection with determining and passing judgment on insurers’ responsibilities as to insurance agents and as to applicants, insureds, owners and beneficiaries and claimants. In particular, in my three regulatory positions previously described, I had daily responsibility to assure and to hold accountable all of the state’s 1,000 mortgage guaranty insurers for their related obligations. I did so through a series of action steps and tools. The action steps and tools included the following:

  1. Claims: NAIC Market Regulation Handbook. As Commissioner, I had as an available tool, the NAIC Market Regulation Handbook (“Examiners Handbook” or “Handbook”). Among other things, this Handbook sets forth standards to assess mortgage guaranty insurer behavior relating to (i) policy application, (ii) policy issuance and (iii) responsibilities relating to their agents. The Handbook also sets forth standards of review as to agent contracts and appointments by insurers of agents. The Handbook is used by every department of insurance in the United States. The standards have been universally agreed to by all of the nation’s Commissioners of Insurance as adopted formally by them through the NAIC. The standards of the Handbook are universally recognized as appropriate standards against which to judge mortgage guaranty insurer behavior. 1,000.
  2. Claims: Market Conduct Examinations. On a regular basis, my regulatory agency conducted Market Conduct Examinations of mortgage guaranty insurers utilizing the Examiners Handbook to determine whether in fact the target insurer was meeting all of their obligations to their insureds and others. This action entailed physically going into the insurers’ application and policy issuance files and claim files to determine any errant action or inappropriate policy behavior. As further discussed below, errant insurers were warned, disciplined and prosecuted as required.
  3. Claims: NAIC Financial Examiners Handbook. As Commissioner, I had available another tool, namely the NAIC Financial Examiners Handbook (“Financial Examiners Handbook”). Among other things, the Financial Examiners Handbook sets forth standards to assess mortgage guaranty insurer solvency on a triennial basis. Among other documents reviewed by examiners in reaching financial conclusions are agent contracts and policyholder matters. As with the Market Conduct Examiners Handbook, the Financial Examiners Handbook is used by every department of insurance in the United States. Similarly, these standards have been universally agreed to by all of the nation’s Commissioners of Insurance as adopted formally by them through the NAIC. The standards of the Financial Examiners Handbook are universally recognized as appropriate standards against which to judge mortgage guaranty insurer behavior.
  4. Claims: Financial Examinations. On a regular basis, my Department conducted financial examinations of mortgage guaranty insurers utilizing the Financial Examiners Handbook to determine whether in fact the insurer was and was likely to remain solvent. As with market conduct exams, financial examinations entailed physically going into the insurers’ operations and studying, among others, files to (i) assure compliance with agent and policyholder duties and claim files (ii) to assure that financial reporting as to agent and policyholder matters were properly carried out. As further discussed below, errant insurers were warned, disciplined and prosecuted as required.
  5. Claims: Complaints From the Public. On a daily basis, my Department received incoming consumer complaints as to mortgage guaranty insurance company practices. This Consumer Protection Division was staffed by Department lawyers who resolved the individual complaint and also, equally important, those lawyers also determined whether an insurer evidenced unacceptable practices — that is to say, whether the incoming consumer complaints in fact constituted a red flag as to the mortgage guaranty insurance company’s potential behavior across the board.
  6. Claims: Prosecution. To the extent insurer behavior required formal action (whether as a result of complaints from the public or as a result of Department investigation through a Market Conduct Examination or the Financial Examination), my Department prosecuted such mortgage guaranty insurers under the state’s civil Administrative Procedures Act. In connection with such prosecutions, I served in various capacities during my eight years as a regulator, including serving as (i) prosecutor (as Assistant Attorney General), (ii) as the decision maker as to whether to initiate prosecution in the first instance (while First Deputy and Commissioner of Insurance) and (iii) as the Administrative Law Judge (“ALJ”) who presided over the prosecution and entered findings of fact and conclusions of law as to insurer coverage determinations and claim settlement practices. I have served as an ALJ in scores of such cases where the mortgage guaranty insurer’s (i) agent, (ii) policy form, (iii) policy application, (iv) claims and (v) overall conduct were the primary issues and I entered final decisions and orders in such matters.

B. Claims: Expertise as to Duties of Mortgage Guaranty Insurance Companies as an Insurance Industry Executive: CEO of a Major US Insurance Organization. I discuss my executive experience at NCCI under this section because in addition to expertise as to policies (discussed above), my experience at NCCI also resulted in expertise as to insurer responsibilities as to applications, policy issuance and their agents and claims.

While I was President and CEO, NCCI was subject to the full range of authority of the FL OIR as discussed above. I am very familiar with the duties of Florida admitted insurers relating to their obligations and responsibilities and the regulatory scheme in place in Florida as to such matters.

While President and CEO of NCCI, I visited and physically toured and reviewed in excess of 400 insurance companies and gained direct exposure to the procedures and processes and standard industry practices of the U.S. insurance community including the mortgage guaranty insurance community in that any number of those insurers had mortgage guaranty insurance operations.

C. Claims: Expertise as to Duties of Mortgage Guaranty Insurance Companies: General Counsel to the American Academy of Actuaries. As stated above, I served as General Counsel and Director of Government Relations for the American Academy of Actuaries. I mention it again here in connection with insurer agent and policy obligations because Academy members included affiliation with virtually every mortgage guaranty insurance company in America. Among other things, such actuaries had duties relating to policy language and policy pricing. The Academy’s Board of Directors was likewise made up of leading insurance company executives from such mortgage guaranty insurance companies.

D. Claims: Expertise as to Duties of Mortgage Guaranty Insurance Companies: Attorney in Private Practice Iowa.As an attorney in private practice, I represented a number of agent and insurer interests and became familiar with applicable mortgage guaranty industry standards of practice, including insurer responsibilities toward their agents. Those interests also included intimate involvement with insurance formed as counsel to the (i) Professional Insurance Agents of Iowa (whose agents sold mortgage guaranty insurance in addition to most all other property casualty coverages) and (ii) the Iowa Association of Life Underwriters (life, health and annuity insurance agents) and (iii) as Iowa Counsel to the Property Casualty Insurance Association of America (“PCIAA”).

3. Expertise as to Mortgage Guaranty Insurance Underwriting.

A. Expertise as to Underwriting Duties and Responsibilities of Mortgage Guaranty Insurance Companies As Commissioner of Insurance. Consistent with the discussion immediately above, I have also had significant experience and responsibility in connection with determining and passing judgment on mortgage guaranty insurance companies’ underwriting duties and responsibilities. In particular, in my three regulatory positions previously described, I had daily responsibility to assure and to hold accountable all of the state’s 1,000 mortgage guaranty insurance companies for their underwriting obligations. As I did in connection with the general duties of mortgage guaranty companies (discussed above), I did so as well as to underwriting through a series of action steps and tools. The action steps and tools included the following:

  1. Underwriting: NAIC Market Regulation Handbook. As Commissioner, consistent with the prior discussion, I also utilized the NAIC Examiners Handbook in that it sets forth standards to assess the underwriting behavior of insurance companies relating to (i) underwriting during the policy application process, (ii) underwriting during the time of policy issuance, (iii) underwriting responsibilities relating to the insurance company’s agents and (iv) underwriting matters that arise subsequent to policy issuance, for example during claim settlement time. As discussed above, the standards are utilized by every state department of insurance and the standards of the Examiners Handbook are universally recognized as appropriate standards against which to judge the underwriting duties and responsibilities of mortgage guaranty insurance companies.
  2. Underwriting: Market Conduct Examinations. Also as discussed above, on a regular basis, Market Conduct Examinations of mortgage guaranty insurers were conducted utilizing the Examiners Handbook to determine whether in fact the target insurer was meeting all of their obligations to their insureds and others as to underwriting issues. This action entailed physically going into the insurers’ application and policy issuance files to determine any errant action or inappropriate underwriting behavior. As further discussed below, errant insurers were warned, disciplined and prosecuted as required.
  3. Underwriting: NAIC Financial Examiners Handbook. As above, I had available another tool, namely the Financial Examiners Handbook, which (parallel to the above discussion) sets forth standards to assess mortgage guaranty insurer solvency on a triennial basis. Among other documents reviewed by examiners in reaching financial conclusions are insurer underwriting files and matters. These standards have been universally agreed to by all of the nation’s Commissioners of Insurance as adopted formally by them through the NAIC and are universally recognized as appropriate standards against which to judge mortgage guaranty insurer behavior, including underwriting.
  4. Underwriting: Financial Examinations. As above, my Department conducted financial examinations of mortgage guaranty insurers utilizing the Financial Examiners Handbook to determine, as with market conduct exams, among others things, (i) assurance of compliance underwriting duties and (ii) assurance that financial reporting matters were properly carried out. As further discussed below (and above), errant insurers were warned, disciplined and prosecuted as required.
  5. Underwriting: Complaints From the Public. On a daily basis, my Department received incoming consumer complaints as to underwriting practices of mortgage guaranty insurance companies. This Consumer Protection Division was staffed by Department lawyers who resolved the individual complaint and also, equally important, those same lawyers also were trained to determine whether an insurer evidenced unacceptable practices — that is to say, whether the incoming consumer complaints in fact constituted a red flag as to an insurance company’s potential underwriting behavior across the board.
  6. Underwriting: Prosecution. To the extent insurer behavior required formal action (whether as a result of complaints from the public or as a result of Department investigation through a Market Conduct Examination or the Financial Examination), my Department prosecuted such insurance companies under the state’s civil Administrative Procedures Act consistent with the discussion in the prior section.

B. Expertise As to Underwriting Duties and Responsibilities of Insurance Companies as an Insurance Industry Executive: CEO of a Major US Insurance Organization with Major Underwriting Duties. I discuss my executive experience at NCCI under this section because my experience at NCCI also resulted in expertise as to insurer responsibilities as to (i) underwriting during the policy application process, (ii) underwriting during the time of policy issuance, (iii) underwriting responsibilities relating to the insurance company’s agents and (iv) underwriting matters that arise subsequent to policy issuance, for example during claim settlement time.

The Gold Standard of Underwriting. While I was CEO, NCCI had the responsibility to formulate and submit for approval to most all of the Insurance Commissioners in the U.S., the underwriting standards used for underwriting most all of the workers compensation policies in this nation. Underwriting for workers compensation is routinely recognized throughout the industry as involving the most intense underwriting of all lines of insurance. This is so because there are over 600 officially designated workers compensation classification codes an employee may be placed in based on their principal job duties.

NCCI authored and maintained a detailed, word-by-word, phrase by phrase description as to each of these 600 classification codes, as to which insurers were required to adhere. That entire intense underwriting process inclusive of its classifications is encompassed in an industry wide recognized and used document called the Scopes Manual and is recognized as the Gold Standard for underwriting workers compensation insurance. Furthermore, the underwriting process, regardless of the line of insurance is fundamentally the same. This is because most all insurers (including mortgage guaranty insurers) are about the business in the underwriting process of selecting the most favorable risks and rejecting the least favorable risks, regardless of the line of insurance. As such, it is the same process brought to bear on different lines of insurance – always with the same goal: identifying good risks and rejecting bad risks.

C. Expertise as to the Underwriting Duties of Mortgage Guaranty Insurance Companies: General Counsel to the American Academy of Actuaries. I served as General Counsel and Director of Government Relations for the American Academy of Actuaries. Academy members included affiliation with virtually every insurance company in America. Among other things, such actuaries had duties relating to the underwriting duties and responsibilities of insurance companies. The Academy’s Board of Directors was likewise made up of leading insurance company executives from such insurance companies.

D. Expertise as to the Underwriting Duties and Responsibilities of Mortgage Guaranty Insurance Companies: Attorney in Private Practice Iowa. As an attorney in private practice, I represented a number of insurer interests and became familiar with applicable mortgage guaranty industry standards of practice, including insurer responsibilities toward the underwriting process, including working directly with the Iowa Association of Life Underwriters (whose duties included among others, the first line of life underwriting).

4. Expertise as to Mortgage Guaranty Insurance Agents.

A. Expertise as to Insurance Agents as a Regulator: Licensure: Mortgage Guaranty Agents. I have had extensive and substantive experience relating directly to the duty of care that comes to bear on insurance agents and agencies in their various relationships with mortgage guaranty insurance companies. As an Assistant Attorney General (see above), I have prosecuted mortgage guaranty insurance agents for violations relating to their duty of care. As an insurance regulator (see above), along with my staff, I have screened hundreds of thousands of agents for character and background (separate and apart from subject matter testing). As to subject matter, I have formulated agent- licensing exams in the first instance. Upon passage of the exam, I have licensed hundreds of thousands of insurance agents.

B. Expertise as to Insurance Agents as a Regulator: Prosecution and CE: Mortgage Guaranty Agents. I have had full responsibility for continuing education for licensed mortgage guaranty insurance agents (approving CE courses in the first instance for acceptable content; overseeing the administration of such courses and granting and denying credit for such courses). I have initiated agent revocation actions and prosecuted those actions to completion.

C. Expertise as to Insurance Agents as a Regulator: ALJ: Mortgage Guaranty Agents. I have sat as the Administrative Law Judge in such actions and entered findings of facts and conclusions of law in scores of cases in which agents were prosecuted for violations relating to standards of care in connection with mortgage guaranty insurance matters and I have had direct responsibility for the appointment process by mortgage guaranty insurance companies (some 500 mortgage guaranty insurance companies) of all of their mortgage guaranty agents. I have supervised as well the ongoing relationship of all mortgage guaranty insurance companies in the state with all of their appointed agents.

D. Expertise as to Insurance Agents: Legal Representation: Mortgage Guaranty Agents. As a lawyer, I have defended mortgage guaranty insurance agents and brokers against allegations (in administrative law forums) of violations of their duty of care.

E. Expertise as to Insurance Agents: Industry CEO: Mortgage Guaranty Agents. As President and Chief Executive Officer of a major Florida domiciled and Florida licensed insurance entity (NCCI) doing business in some 40 states, I have had substantial working relationships with the U.S. insurance agent and agency community.

5. Expertise as to Actuarial Issues Mortgage Guaranty Insurance.

A. Expertise as to Actuarial Issues as a Regulations: Mortgage Guaranty. As Insurance Commissioner, my agency was responsible for solvency oversight, insurance company examinations and financial and accounting matters of insurance companies. In particular, that oversight included the responsibility of overseeing practices of insurers, agents and actuaries who formulated their rates. In addition, I oversaw the state regulation of the securities industry with Iowa’s Superintendent of Securities reporting directly to me.

As a member of the NAIC, I served as both Vice Chairman and Chairman of the NAIC Life Insurance Committee. The charge of this Committee was oversight over all issues relating to life insurance products as well as life insurers, including practices such as underwriting. This Committee’s work included considerations relating to underlying actuarial issues as to the pricing and unfolding of this product.

B. Expertise as to Actuarial Issues as a CEO. During my tenure as CEO, NCCI had (and continues to have) responsibility to accurately price and file pricing for some $12 – $15 billion of workers compensation insurance in 39 states throughout the U.S. NCCI prepared proposed premium filings for regulators to approve by extracting key data from its 600 member insurance companies and then used that data to project necessary premium changes. NCCI carried out its intense pricing work though the professional efforts of an actuarial division of about 150 personnel. These individuals included support staff; statisticians; actuarial students and qualified actuaries. This staff produced about 40 major rate filings annual covering 40 states, pricing some $12 to $15 billion of insurance (workers compensation); and included the responsibility to advocate those rate changes before state government.

C. Expertise as to Actuarial Issues: American Academy of Actuaries. I served as General Counsel and Director of Government Relations for the American Academy of Actuaries, including advising on admissions, discipline, federal antitrust and general corporate law. I represented the 20,000-member professional organization before Congress (e.g., Senate Committees on Banking, Commerce, Finance and Labor, and House committees on Education, Labor, Energy, and Ways and Means) and the various federal regulatory agencies. The Academy is the professional organization of actuaries and includes qualified actuaries from all disciplines and all forms of insurers. Academy members included affiliation with virtually every property casualty insurance company and actuarial consulting company in America. The Academy’s Board of Directors was likewise made up of leading insurance company executives from such companies.

D. Expert Experience and Authorship on Actuarial Issues. I have served in a number of cases as an expert on actuarial issues, including in Arizona, Florida and California. I am also the author of a number of articles on the actuarial profession.

E. Actuarial Issues as Reinsurance Arbitrator. I am certified by ARIAS as one of about 400 U.S. certified reinsurance arbitrators and sit as an arbitrator on disputes between insurers and their reinsurers; actuarial issues routinely arise in such disputes in the form of pricing disputes including information (and mis-information) supplied by the ceding company and that information’s (and mis-information’s) positive or adverse effect on the pricing that was agreed to at the time of the initial reinsurance agreement.

ADDITIONAL MORTGAGE GUARANTY EXPERTISE.

Among my positions and experiences, the following are particularly helpful in connection with mortgage guaranty insurance and should be read together with the material above and in my Curriculum Vitae:

A. Formal Education.

1. Bachelors Degree in Mathematics. I hold a bachelors degree in secondary mathematics education from the University of Northern Iowa;

2. Masters Degree in Education (Psychology). I hold a masters degree in educational psychology from the University of Hawaii; and

3. Juris Doctor Degree. I hold a Juris Doctorate degree from the University of Illinois.

B. Legal Background.

4. Lawyer. I am a member of The Florida Bar, and have been an insurance lawyer since 1975. I am also licensed to practice law in the states of Iowa and Illinois (this license is currently in inactive status at my request and is eligible for reactivation at any time upon my request) and before the U.S. Supreme Court.

C. Licensure and Certification.

5. Certified Reinsurance Arbitrator. I am certified by AIDA Reinsurance and Insurance Arbitration Society-United States (sometimes “ARIAS-US”) as one of approximately 400+ U.S. certified reinsurance arbitrators, and sit as an arbitrator on disputes between mortgage guaranty insurers and their reinsurers.

D. Insurance Expert.

6. Expert Witness. I have served as an expert witness throughout the U.S., and have been qualified as a witness in 20 or so states as an expert in open court.

7. Consultant to the U.S. Attorney. By way of example of my various assignments, I have been retained in the past by the U.S. Attorney, Middle District of Florida, as an insurance consultant in a complex civil insurance matter.

8. Insurance Consultant: U.S. Department of Justice. Similarly, I have also been retained by the U.S. Department of Justice as an insurance consultant in a complex insurance case.

9. Expert Witness: United States Air Force. I also served as an expert witness to the United States Air Force in a complex environmental pollution matter.

Expert Witness: Various State Departments of Insurance. I have also been retained by the Liquidation Division of the Florida Department of Financial Services as an expert witness and testified on its behalf in both Federal Court in Tampa and in Leon County Circuit Court as its expert in complex insurance liquidation matters. I have similarly been retained as an insurance expert by the state of Arizona in a major liquidation case. Likewise, I have been accepted as and testified as an insurance expert before the Arizona, Oklahoma, South Dakota, Nevada and Texas Departments of Insurance, among others.

E. Reinsurance Arbitrator.

10. Reinsurance Arbitrator, November 2003 to Present. As indicated above, my background includes extensive exposure to the various reinsurance mechanisms and relationships. Further details are set forth below relating to this experience. In addition, I am a certified ARIAS-US reinsurance arbitrator (see immediately below). The relevance of this experience is that reinsurers have substantial influence on the behavior of their underlying mortgage guaranty insurers from whom business is ceded.

As of November 2003, I was certified by ARIAS-US as an arbitrator for reinsurance and insurance matters. Today, there are more than 400+ individuals so certified by ARIAS-US in the United States. ARIAS-US certifies knowledgeable and reputable professionals for service as panel members in reinsurance and insurance arbitration matters. The organization’s criteria for certification are as follows:

  • 10 years of significant specialization in the insurance/reinsurance industry;
  • Arbitration experience–must have completed appropriate credited ARIAS seminars;
  • A member in good standing of ARIAS-US; and
  • Appropriate endorsement from existing members.

F. Industry Background.

11. Chief Executive Officer of a Major Insurance Industry Regulated Organization—President and CEO of the National Council on Compensation Insurance (sometimes “NCCI”), 1990–1998. NCCI is one of the larger and more pervasive U.S. insurance organizations. During my tenure as CEO, NCCI had (and continues to have) responsibility to accurately price and file pricing for some $12-$15 billion of workers compensation insurance in 40 states throughout the U.S. NCCI prepared proposed premium filings for regulators to approve by extracting key data from its 600 member insurance companies, and then used that data to project necessary premium changes. NCCI accomplished this mission through some 1,000 employees, approximately 600 of which were professionals, and had annual revenues of $150 million.

Regulated Throughout the U.S. by State DOIs. While I was President and CEO of NCCI, the company did business in approximately 40 states, including Florida. As such, the company was governed by the Florida Insurance Code (and continues to be so governed today), including all applicable provisions relating to Florida insurance law (as it was governed as well by the balance of the states in which it did business). In addition, NCCI was subject to pervasive regulatory oversight by the FL OIR. Finally, NCCI was subject to the applicable jurisdiction of all Florida’s state and federal courts. As a result, I am generally familiar with applicable Florida insurance laws, regulations, and related civil proceedings. More to the point, as an insurance entity doing business throughout the U.S., NCCI was likewise regulated or overseen by each of the State DOIs, governed by the Insurance Codes of the various states and subject to those state’s court’s jurisdiction.

Insurance Program. As CEO, I had daily exposure and responsibilities to the U.S. workers’ compensation program as administered by the various states. This program constitutes one of the largest life insurance programs in the world, with some 100 million worker lives insured.

Insurance Company Practices. In addition, NCCI had a vested interest in member insurers’ reputation for fairness because it impacted regulatory attitudes toward NCCI’s premium approval process.

Sales Practices. In addition, NCCI had a vested interest in member insurer sales practices in that the industry’s reputation for fair sales practices ultimately impacted regulatory attitudes toward NCCI’s premium approval process.

Agent and Broker Practices. Most all workers’ compensation products are sold through agents and brokers and as such, as CEO of NCCI, my responsibilities included creating and sustaining liaison with all of the operative U.S. agent associations and communities. I have had extensive exposure to agent and insurer practices and procedures.

Industry Standards of Practice. While President and CEO of NCCI, I visited, physically toured, and reviewed more than 400 insurance companies. I also gained direct exposure to the procedures, processes, and standard industry practices of the U.S. insurance community and its agents. As stated, most all workers’ compensation products are sold through agents, and accordingly as CEO of NCCI, my responsibilities included creating and sustaining liaisons with all of the operative U.S. agent associations and communities. Furthermore, I have had extensive exposure to agent and insurer practices and procedures. In addition, regarding workers’ compensation, many of these companies were also licensed to sell mortgage guaranty insurance.

12. General Counsel and Director of Government Relations to the American Academy of Actuaries (Washington D.C.), 1980-1983. I served as General Counsel and Director of Government Relations for the American Academy of Actuaries (sometimes “the Academy”). My responsibilities in this position included advising on admissions, discipline, federal antitrust law, and general corporate law. I represented this 10,000 member professional organization before Congress (e.g., Senate Committees on Banking, Commerce, Finance and Labor, and House Committees on Education, Labor, Energy, and Ways and Means) and the various federal regulatory agencies.

Mortgage guaranty Insurance Companies: Agents and Brokers. The Academy is the professional organization of actuaries, and includes qualified actuaries from all disciplines and all forms of insurers. The Academy’s members had affiliations with virtually every mortgage guaranty insurance company in the U.S. The Academy’s Board of Directors likewise was comprised of leading insurance company executives from such companies whose duties included that of sales oversight.

13. Risk Metrics Corporation: Marketing to Agents and Brokers. I co-founded this Florida-based information company in 1998. Risk Metrics (including Datalister, Inc.) gathers and sells public data relating to workers’ compensation insurance to a wide range of insurance-oriented customers, including insurance agents and brokers. Within the last number of years, I have sold my interest in this corporation.

14. Attorney in Private Practice. As an attorney in private practice, I represented a number of agent and insurer interests, and became familiar with regulatory and industry standards of practice. Those interests included the position of Iowa Counsel to the Property Casualty Insurers Association of America (“PCIAA”).

Mortgage Guaranty Issues. Those interests also included intimate involvement with the agent community as counsel to the:

  • Professional Insurance Agents of Iowa, whose agents sold mortgage guaranty insurance; and
  • Iowa Association of Life Underwriters (i.e., life insurance agents).

My specific duties as counsel to both the Professional Insurance Agents of Iowa and the PCIAA included an in-depth familiarity with mortgage guaranty insurance products and insurance agents and their issues.

G. Regulatory.

15. Commissioner of Insurance, Iowa, 1986-1990. As Insurance Commissioner appointed by Governor Terry Branstad in July 1986, I was responsible for the regulatory oversight of all insurance companies, agents, and brokers authorized to conduct business in the state of Iowa. My Department was responsible for solvency oversight, insurance company examinations, financial and accounting matters of insurance companies, consumer protection, agent and broker licensing, and oversight of the property and casualty and mortgage guaranty insurance company practices. In particular, that oversight included the responsibility of overseeing practices of mortgage guaranty insurance agents and brokers. In addition, I oversaw the state regulation of the securities industry, with Iowa’s Superintendent of Securities reporting directly to me.

Regulatory Oversight: Mortgage Guaranty Insurer Practices. As Insurance Commissioner, my responsibilities included oversight over the education, licensing, discipline, and general supervision of all mortgage guaranty insurance companies and all mortgage guaranty insurance agents in the state of Iowa. Consequently, I am very familiar with the responsibilities and applicable duty of care that come to bear upon mortgage guaranty insurance companies and their agents.

Regulatory Oversight: Mortgage Guaranty Insurance Agent Practices: Prosecutions. As Insurance Commissioner, I also had day-to-day responsibility to assure that all relationships carried out by insurance companies doing business in the state met all of their duties, obligations and statutory and regulatory responsibilities as they conducted business with their agents. This included oversight over (i) screening for character and competency on a pre-licensure basis, (ii) licensing, (iii) revocation of licenses, (iv) continuing education and its administration and enforcement, (v) accounting and (vi) agent relationships with their insurers.

Examination of Mortgage Guaranty Insurance Companies. As Insurance Commissioner, I directed and oversaw the examination of all insurance companies authorized to do business in the state of Iowa. Those examinations included a focus on both financial matters (so-called triennial examinations of insurers—more than 100 such examinations were conducted while I was Commissioner) and examinations of specific complaints about insurers (so-called Market Conduct Examinations—more than 50 such exams were conducted while I was Commissioner).

Market Conduct Examinations of Mortgage Guaranty Insurer Practices Including Practices With Their Agents. Market Conduct Examinations focused on marketplace issues, specifically examining mortgage guaranty insurance companies as to compliance with their agent and policyholder duties. Concurrent with such exams, I personally reviewed and approved the final examination reports before they were issued. In addition, in many of these instances, I visited the subject mortgage guaranty insurer before the examination report was issued. These visits involved walking the floors of such insurance companies; in other words, reviewing their affected operations first-hand.

Prosecution of Mortgage Guaranty Insurance Companies for Violations of Standard of Care. As Insurance Commissioner, I employed a full-time team of lawyers who fielded consumer complaints relating to all areas of mortgage guaranty insurers as well as premium finance companies. Indeed, many of these complaints as well as results of Market Conduct Examinations resulted in formal action under the state’s Administrative Procedures Act, with the mortgage guaranty insurer’s license to conduct business in the state at risk for failing to adhere to their duties. At times, I served as the Hearing Officer on such matters.

Major Insurance State. Iowa has approximately 1,000 authorized property and casualty insurance companies, more than 500 life insurance companies, and an unusually large number of domestic insurance companies. As such, insurance regulation in that state is a serious job.

16. National Association of Insurance Commissioners, 1986-1990. Concurrent with my service as Iowa Insurance Commissioner, I served as a member of the NAIC. The NAIC is an organization of the Insurance Commissioners of all 50 states, and meets quarterly in locations throughout the U.S. to consider and evaluate national insurance issues. Further, the organization is professionally staffed with more than 100 personnel. The organization is based in Kansas City, Missouri. The NAIC considers all major insurance issues, and then promulgates model insurance laws and regulations, which are routinely (but optionally) adopted at the individual state level.

NAIC Chairmanships–Chairman of the Midwest Zone. I was elected by my fellow Insurance Commissioners from the Midwest Zone (composed of the Midwest states, which constitutes approximately one quarter of all of the states) to provide leadership and representation of the Midwest before the balance of the states. This position included a position on the Executive Committee of the NAIC, as well as major responsibilities relating to the assignment of states (and their related examiners) to specific examinations, both triennial and Market Conduct.

NAIC Leadership—Member of the Executive Committee. I also served as an elected member of the Executive Committee of the NAIC, the body that served as the steering committee of the organization, providing leadership between full membership meetings and recommendations to the full membership as to complex or politically-charged issues within the organization. In addition, this position included oversight responsibility over the following NAIC Committees: A, B, C (the Property and Casualty Committee which oversaw mortgage guaranty insurance), D and E.

Other NAIC Chairmanships. I also served in a number of NAIC capacities, including Chairman of the Financial Services and Insurance Regulation Task Force.

Member—Commercial Lines Committee. In addition, I served as a member of the NAIC Commercial Lines Committee. This committee considered all issues relating to commercial lines policies.

My service on the following NAIC Committees was also helpful in this regard:

  • Member, the Blanks Committee;
  • Member, Guarantee Fund Committee;
  • Member, Rehabilitator and Liquidators Committee;
  • Member, Casualty Actuarial Committee;
  • Member, Commercial Lines Committee;
  • Member, Valuation of Securities Committee;
  • Member, International Insurance Relations Committee;
  • Member, Accounting Practices and Procedures Committee; and
  • Member, State and Federal Legislative Committee.

Ongoing Regulatory Involvement. In the years since leaving the regulatory ranks, I have continued to be closely involved with the NAIC and the regulatory community. As President and CEO of NCCI, I was in regular attendance at meetings of the NAIC. I continue to attend these meetings and to be actively engaged with the regulatory process. Included in attendance at NAIC meetings were my observations at the NAIC of the ongoing regulation of mortgage guaranty insurers and their agents.

17. First Deputy Iowa Insurance Commissioner, 1976-1978. As First Deputy Insurance Commissioner, I had oversight responsibility over all facets of insurance regulation, including oversight of the property and casualty division, the mortgage guaranty insurance division, agent licensing, consumer complaints, and premium finance companies. As First Deputy Commissioner, the functions of overseeing all aspects of mortgage guaranty insurers belonged to me. Furthermore, in this position, I had extensive exposure to and direct responsibility for all facets of mortgage guaranty insurers’ activity, including oversight over insurers’ relationships.

Regulatory Oversight: Mortgage Guaranty Insurance Agent Practices. As First Deputy Insurance Commissioner, I also had day-to-day responsibility to assure that all relationships carried out by insurance companies doing business in the state met all of their duties, obligations and statutory and regulatory responsibilities as they conducted business with their agents. This included oversight over (i) character and competency screening on a pre-licensure basis, (ii) licensing, (iii) revocation of licenses, (iv) continuing education and its administration and enforcement, (v) accounting and (vi) agent relationships with their insurers. I am very familiar with the responsibilities and applicable duty of care that come to bear upon insurance companies in their relationships with their agents.

Regulatory Oversight—Mortgage Guaranty Insurer Practices. In addition to expertise as to policy forms and coverage issues, as First Deputy Insurance Commissioner, my responsibilities included oversight over the education, licensing, discipline and general supervision of all mortgage guaranty insurance companies and their agents in the state of Iowa. I am very familiar with the responsibilities and applicable duty of care that come to bear upon mortgage guaranty insurance companies.

Financial Examination of Mortgage Guaranty Insurance Companies. As First Deputy Insurance Commissioner, I supervised (along with the Chief Examiner) the examination of all insurance companies authorized to do business in the state of Iowa. Those examinations included a focus on both financial matters (so-called triennial examinations of insurers–more than 100 such examinations were conducted while I was First Deputy Commissioner) and examinations of specific complaints about insurers (so-called Market Conduct Examinations–more than 50 such exams were conducted while I was First Deputy Commissioner).

Prosecution of Mortgage Guaranty Insurance Companies and Their Agents for Violations of Standard of Care. As First Deputy Insurance Commissioner, I employed a full-time team of lawyers who fielded consumer complaints relating to all areas of mortgage guaranty insurers as well as premium finance companies. Indeed, many of these complaints, as well as results of Market Conduct Examinations, resulted in formal action under the state’s Administrative Procedures Act with the mortgage guaranty insurer’s or agent’s license to conduct business in the state at risk for failing to adhere to their duties. At times, I served as the ALJ on such matters.

18. Iowa Assistant Attorney General Assigned to the Insurance Department, 1975-1976. As Assistant Attorney General, I had departmental prosecutorial responsibilities for violations of the Insurance Code under the state’s APA, including those violations committed by mortgage guaranty insurance companies and their agents and brokers. The Attorney General responsibility also included issuing Attorney General Opinions as to the construction of insurance laws and regulations. In short, I served as the Insurance Department’s General Counsel.

19. Legal Counsel to Iowa House of Representatives. As legal counsel to the Iowa House of Representatives in the 1975 session, I provided counsel on all relevant caucus issues as well as the following support:

  • Researched pending legislation;
  • Prepared memorandums in support of proposed legislation;
  • Provided legal advice; and
  • Participated in bill drafting, including that relating to mortgage guaranty insurance and mortgage guaranty insurance agents.

20. Lecturer at the Iowa Bar Review School, 1985-1990. I was invited to provide the insurance content review material and lecture for the insurance section of the bar review course in Iowa. Included in this lecture was extensive law applicable to the interpretation and construction of laws and regulations affecting mortgage guaranty insurance companies, including practices relating to their agents. I authored this material and provided this lecture to students studying to pass the Iowa bar for approximately five years, until accepting the position of CEO of NCCI in Florida.

21. Chief of Staff at the U.S. Congress. I served as an Chief of Staff at the U.S. Congress in Washington D.C. to an Iowa Congressman for approximately one year. Among other activities, I participated in legislative drafting of insurance and reinsurance legislation.

22. Elected Member of the Florida House of Representatives: Member of the Insurance Committee; Vice Chair of an Insurance Subcommittee; Member and Vice Chairman of the Civil Justice Subcommittee. I serve as an elected member of the Florida House of Representatives for House District 89 (Boca Raton and Delray Beach north to Palm Beach). Among others, I serve on the House Insurance Committee and as a subcommittee Vice Chairman, which have oversight over all insurance activities in the state of Florida, including that of oversight over mortgage guaranty insurers, their agents and brokers, and their relationships with their insureds and those related to their insureds. In addition, I serve as a Member and Vice Chairman of the Civil Justice Subcommittee which considers many statutory provisions impacting insurance.

Contact Bill Hager at 561-306-5072 or via email to discuss your case.