A new rule introduced by Fannie Mae and Freddie Mac could hinder the transition to actual value policies in the home-property insurance industry. Starting June 1, these entities, which support 70% of the U.S. mortgage market, will require insurance policies for most homeowners to cover the replacement value. According to Fannie Mae’s announcement, policies that limit losses or offer lower pricing will not be accepted. The National Association of Mutual Insurance Companies and the Big I have called for the suspension of these changes, stating that the rule will create issues for policyholders, insurance companies, and agents.
Source and Details: Insurance Journal