The fact that insurers want to undo an arrangement that has been in place for so long is a sign of the times -- they are toughening up their attitude, as, indeed, are banks.
In 1992, the insurance market, represented by the Association of British Insurers
(ABI), entered into an agreement with the British Banking Association (BBA).
This agreement ensured that insurance policies on buildings covered the interest of banks that had made loans on property. It was not intended to replace specific obligations or undertakings, but rather to be a safety net for banks.
Last summer, the ABI told the BBA that it intended to cancel the agreement because it had fallen out of use. Many of the original signatories, both banks and insurers, were no longer in business, it said, and many new ones were not included. The agreement will end on 30 June 2012, following a notice period starting on 1 January.
The agreement was intended for residential loans. For loans with specific arrangements in place, as one would expect on most commercial property, the cancellation should have no effect.
However, the fact that insurers want to undo an arrangement that has been in place for so long is a sign of the times -- they are toughening up their attitude, as, indeed, are banks...
Read this article in full
In 1992, the insurance market, represented by the Association of British Insurers
(ABI), entered into an agreement with the British Banking Association (BBA).
This agreement ensured that insurance policies on buildings covered the interest of banks that had made loans on property. It was not intended to replace specific obligations or undertakings, but rather to be a safety net for banks.
Last summer, the ABI told the BBA that it intended to cancel the agreement because it had fallen out of use. Many of the original signatories, both banks and insurers, were no longer in business, it said, and many new ones were not included. The agreement will end on 30 June 2012, following a notice period starting on 1 January.
The agreement was intended for residential loans. For loans with specific arrangements in place, as one would expect on most commercial property, the cancellation should have no effect.
However, the fact that insurers want to undo an arrangement that has been in place for so long is a sign of the times -- they are toughening up their attitude, as, indeed, are banks...
Read this article in full
