Bulletin: LA2009004

Dear Associates: 

The Louisiana Department of Insurance has approved the following change to the LATISSO Rate Rule for the Simultaneous Issuance of Owner's and Mortgagee's Policies.  The Rate Rule change is effective April 1, 2009, and is as follows:

Simultaneous Issuance of Owner's and Mortgagee's Policies
When an owner's policy and a mortgagee's policy are issued simultaneously, bearing the same date, and covering the same land (or a portion thereof) but no additional land, and the mortgagee's policy coverage is equal to or less than that of the owner's policy; the charge for the owner's policy shall be at the filed rate and a simultaneous issue rate of $100 shall be charged for the mortgagee's.

When the mortgagee's policy coverage exceeds that of the owner's policy, the premium for the owner's policy shall be at the filed rate and the additional coverage afforded on the mortgagee's policy shall be calculated using the mortgagee's policy filed rate, plus a $100 simultaneous issue fee.

This provision does not apply to simultaneous first and second mortgage transactions; but does apply to Expanded Coverage Owners and Expanded Coverage Mortgagee Policies.

Example 1:

An Owner's Policy is requested for $267,000 with a Mortgagee's policy of $225,000. The rate is "per thousand," so divide by 1000 leaving us with 267. 

°  First $12,000 cost $100.00
°  Next $38,000 (38 x $5.40) cost $205.20
°  Next $50,000 (50 x $4.80) cost $240.00
°  Last $167,000 (167 x $4.50) cost $751.50
°  All added together give a total premium of $1,296.70

The mortgagee's policy would be $100.00, plus, all applicable endorsements.

Example 2:

When a Mortgagee's policy amount exceeds the Owners policy amount:

Owner's Policy Amt.   $30,000.00       
            Owner's Premium Rate         $197.20
            Simultaneous Issue Rate        $100.00
            Subtotal Premium                  $297.20

Loan Policy Amt.         $70,000.00       
            Loan Premium Rate               $331.60 
            Less Premium Rate on
            $30,000.00                           -$175.60
            Balance Due - Loan Policy  $156.00
                                                                   
Total Premium Collected:                   $453.20

The Louisiana Rate and Form Manual has been updated to reflect the addition of these new forms and new rates.  Please go to www.stgla.com for the updated manual and the new forms in electronic format.

If you have questions relating to this bulletin, please contact Louisiana Underwriting Personnel at (800) 209-4675 or Stewart Legal Services.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.