NMLS Registers 42,000 Mortgage Loan Originators
The Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) announced recently that in the first three quarters of operations, the Nationwide Mortgage Licensing System (NMLS) has registered more than 42,000 mortgage loan officers. Additionally, more than 8,600 mortgage companies are using NMLS to manage their licenses in 15 participating states. The District of Columbia intends to join NMLS in August 2009 and begin to process license applications on-line for loan originators, as well as mortgage brokers and lenders for calendar year 2010.
In its first nine months of operation, NMLS has proven itself an effective and efficient tool to improve state supervision and increase accountability of mortgage companies and professionals, according to CSBS and AARMR. The system was launched January 2008, culminating a five-year development period. NMLS is a web-based system that allows state-licensed mortgage lenders, mortgage brokers, and loan officers to apply for, amend, update or renew a license online for all participating state agencies using a single set of uniform applications. The system is used by state residential mortgage regulators to accept and process uniform license applications and renewal forms created by states. Licensees are able to manage a single record electronically in the system to apply for, amend, renew, and surrender licenses with one or more state regulators. Presently, 47 states, plus the District of Columbia and Puerto Rico, have indicated their intent to participate in NMLS. Visit this link for more information about NMLS.
Equity Indexed Annuities
The Securities and Exchange Commission (SEC) proposed new rules to clarify the status of Equity Indexed Annuities under the federal securities laws. The rule would prospectively define certain indexed annuities as not being defined as “annuity contracts” or “optional annuity contracts” under the insurance exemption in the Securities Act of 1933 if the amounts payable by the insurer under the contract are more likely than not to exceed the amounts guaranteed under the contract. DISB has been working with the National Association of Insurance Commissioners, which is reviewing the proposed rules and has submitted comments to the SEC. It is the position of state insurance regulators that equity indexed annuities are insurance products and they should be exempt from regulation under the Securities Act of 1933.
DISB introduces email notification for producer license renewals
DISB recently implemented a new service to notify insurance producers about a pending license renewal by email. This new feature coincides with the conversion to birth-month renewals for the two-year producer license. Each producer has until the end of the month in which his or her birthday falls to renew. The new system began issuing notices for producers renewing for August 2008. Please ensure that your email address is up-to-date with DISB. To do so, go to nipr.com to verify it. If you have any concerns, please contact DISB’s Insurance Licensing Division by calling (202) 727-8000 or send an email to zadie.bowles@dc.gov.
2008 Annual Captive Conference
The Captive Insurance Council of the District of Columbia (CIC-DC) will host its 7th annual conference on November 10-11, 2008, at L’Enfant Plaza Hotel, 480 L’Enfant Plaza, SW, in Washington, DC. As the fourth leading domicile for captive insurance in the United States (based on licensed entities), the District of Columbia has become the domicile of choice for the fast-growing alternative risk transfer marketplace. This year’s conference, ART—Beyond Traditional Solutions, will offer a high caliber educational program designed to bring attendees up-to-date with the latest developments and issues making an impact on the captive industry. DISB Commissioner Thomas E. Hampton will give a welcome address as well as highlight DISB’s news of interest to the captive insurance industry. This year’s keynote speaker is Maurice “Hank” Greenburg, former chairman and CEO of American International Group and current chairman and CEO of C.V. Starr. He will address the state of captive insurance regulation.. For more information, please visit the CIC-DC website at dccaptives.org.
Auction Rate Securities Cases
The North American Securities Administrators Association (NASAA) announced that settlements in principle have been reached with all of the “first tier” broker-dealers including Bank of America and RBC Capital Markets—that issued or made markets in auction rated securities. Now the issue is the “second tier” firms, which may have acted only passively. Some of them are resisting liability on the basis that they did not make any active representations regarding the characteristics of these securities.
Understanding CAPCOs: It is not a Grant Program
DISB is updating its information on the DC Certified Capital Company (CAPCO) program on its website, and is using this opportunity to reintroduce the program to the District’s small business community. The CAPCO program is an effort by the District of Columbia to increase private capital investment in new or expanding small businesses operating in our city. Through the program, insurance companies receive a DC tax credit against their premium taxes in exchange for making $50 million available to the three CAPCOs in the form of long-term equity and debt for new or expanding small businesses based in the District. The three CAPCOs are managed by venture capitalists; they stimulate the creation of high-wage jobs and provide an incentive to retain, expand, and attract business to DC.
It is important to distinguish the CAPCO program from a grant program; CAPCOs make investments, not grants, into qualifying businesses. As such, the DC CAPCO program may not be well-suited to every business that meets the minimum qualifications. Meeting the program’s minimum qualifications is not a guarantee that the CAPCOs will be able to make investments into those businesses. It is important to understand that the CAPCOs decide which businesses to fund, based on criteria established by each CAPCO. Additionally, the CAPCO law that created the program does not establish the terms of the funding. Instead, business owners and the CAPCOs must negotiate all terms. The law does not authorize the District government to get involved in any aspect of the funding decisions, other than ensuring that the businesses that receive funding meet the minimum qualifications listed below.
Besides having a product or service with strong commercial potential, a sound business strategy, and capable management, companies interested in applying for investment via the DC CAPCO program must meet the following requirements:
- Company headquarters and principal operations must be located within the District of Columbia;
- 25 percent of the company’s employees must be District residents;
- 75 percent of the company’s employees must work in the District;
- The business must qualify as a “small business concern” as defined by the US Small Business Administration's requirements for SBA loan applicants;
- The business must certify that it has attempted and failed to obtain conventional financing; and
- The business cannot be engaged in professional services provided by accountants, lawyers or physicians.
If you have a business that meets the minimal qualifications for the DC CAPCO program, and if you have a business plan ready for consideration as well as the necessary financial records (such as tax returns from the last two years, payroll records, and personal financial statement), please email your contact information, business plan, and response to the minimum qualifications to the following individuals for consideration:
Advantage Capital Partners
Douglas Beekman
3128 M Street, NW, Suite 310
Washington, DC 20007
(202) 337-0034
dbeekman@advantagecap.com
Enhanced Capital Partners
Mark Slusar
1225 Potomac Street, NW
Washington, DC 20007
(202) 342-0815
mslusar@enhancedcap.com
Wilshire DC Partners
Matthew Ash
1667 K Street, NW, Suite 500
Washington, DC 20006
(202) 912-4810
mash@newtekbusinessservices.com
For more information on the CAPCO program, please call DISB at (202) 727-8000 and ask for the Risk Finance Bureau.
Life Insurance Awareness Month
DISB marked the month of September as Life Insurance Awareness Month by encouraging District of Columbia residents to take stock of their life insurance needs. The death of a family member is a painful experience for those left behind, not only emotionally, but often financially as well due to inadequate life insurance protection. According to LIMRA International, an insurance research firm, an estimated 68 million adult Americans have no life insurance, and most of those with coverage have far less than experts recommend. DISB signed on in support of LIAM activities with the National Association of Insurance and Financial Advisors (NAIFA) federation. The agency used the month to increase public awareness about the importance of life insurance in providing protection for unforeseen events and the benefits of advice from financial service professionals. Mayor Adrian M. Fenty signaled his support of this initiative with a mayoral proclamation.
DISB Warns of Email Claiming to be From the FDIC
DISB recently warned District consumers to be aware of a fraudulent email with the appearance of being sent from the Federal Deposit Insurance Corporation (FDIC). The subject of the email states, “Funds wired into your account are stolen.” It tells recipients that the proceeds of identity theft crimes have been wire-transferred into their bank account; the email then directs recipients to open and review an attached copy of their bank account statement. The attached file is actually an unknown executable file. DISB is warning recipients that this file is a malicious attempt to collect personal or confidential information, some of which may be used to gain unauthorized access to online banking services or to conduct identity theft.
Please be advised that the FDIC does not issue unsolicited emails to consumers. Financial institutions and consumers should NOT open the executable file attached to the fraudulent email. You may report suspicious emails regarding the FDIC by sending an email to the FDIC financial crimes unit at alert@fdic.gov or call the FDIC toll-free at 1-877-ASK-FDIC (1-877-275-3342). If you have been a victim of the above scam and would like to file a complaint, please contact DISB at (202) 727-8000.
DISB to Mark Health Insurance Awareness Month
For a second time in a row, DISB will use the month of November to mark the District’s Health Insurance Awareness Month. Health insurance helps people receive timely medical care that improves their health and their lives. Overall, people who are uninsured receive about half as much care as the insured. The agency will use this month, which coincides with the District and federal government’s open enrollment period, to bring attention to the need for health insurance. Although the District fares relatively well in terms of health coverage provided to its residents, about one in 10 is still without health coverage, according to data by the DC Department of Health. DISB will host an event for its employees interested in finding out more about the types of coverage the government offers. Also, residents may visit healthinsurance.dc.gov, a one-stop resource that can help residents find health care coverage appropriate for them. DISB worked with the Department of Health and the Office of the Chief Technology Office to launch the Web portal in 2007.