MS SB2786

Establishes regulatory framework for the Department of Insurance to regulate lender-placed insurance on mortgaged real property, including manufactured homes and modular units.

Prohibits insurers and insurance producers from issuing lender-placed insurance if they or their affiliates own, service, or own servicing rights to the mortgaged property; prohibits compensation including commissions, contingent payments, profit-sharing arrangements, or free/below-cost services between insurers and lenders, servicers, or investors.

Requires lender-placed insurance coverage amounts be based on replacement cost value determined by last known coverage amount, insurer calculation, or unpaid principal balance of mortgage loan; excess coverage amounts above unpaid principal must be paid to mortgagor upon covered loss.

Mandates individual policies or certificates be mailed to mortgagors with specified information including property address, coverage amount, effective date, term, premium charge, and claim filing contact information.

Requires insurers with $100,000+ annual premium to report loss ratios, earned premium, expenses, and losses annually; insurers with loss ratios below 35% for two consecutive years must submit rate adjustments within 90 days; violations subject to penalties up to $1,000 per violation ($100,000 aggregate) or up to $25,000 per flagrant violation ($250,000 aggregate), effective July 1, 2024.