Attention all METLIFE agents…
In specific North Texas territories, MetLife is requiring the ACV roof loss settlement starting with new business effective 5/1/2017.  This change will also impact your renewal customers starting with renewals in mid-June.
In addition, Grand Protect and Platinum new business is being suspended effective 5/1/2017,as both products currently do not allow for the ACV endorsement.
Please review the following in detail and forward to any of your staff that handles MetLife business.
Guideline Bulletin from CountrywideUnderwriting
What's the news?
We have revised our Texas Met LloydsSM homeowner underwriting guidelines in support of our upcoming Mandatory Coverage 42 – ACV roof loss settlement with the goal of rapidly improving Texas property loss results.
What are the details?
The following sections will provide you with information for each of the components related to the changes in place and those still pending approval by the Texas Department of Insurance (TDI). 
The use of mandatory Coverage 42 ACV loss settlement for Roofs for Wind and Hail perils applies only in the designated north Texas territories.  The supporting underwriting guidelines have been approved by the Texas Department of Insurance (TDI).The revisions represent an immediate measure to mitigate losses from roof claims caused by wind and hail perils. Coverage 42 must be included with all new business RPP owners or Landlords applications written on or after 5/1//2017. 
Temporary Suspension of GrandProtect/Platinum Products:
We are temporarily suspending the writing of GrandProtect and Platinum products for new business in the designated territories beginning on 5/1/2017.  In their current configuration these products provide loss settlement for roof damage on a replacement cost basis, so this suspension will need to continue until such time as the forms filing and rates for the Roof Depreciation Schedule are approved by the state, and the project is installed and implemented. 
Note: The revised guidelines to support this temporary suspension are below and can be viewed on page 6 of the guidelines under footnote 2.
2.  Platinum / GrandProtect products are not available in territories 20, 33, 34,35, 36, 37,38. 39, 40, 41, 42, 43, 44, 61, 65, 69, 71, 72, 73, 76,  77, 81,
     84, 85, 87, 88 and 89 
Ineligible (Previously was Prior Approval):
·        All wooden roofs and flat roofs.    Applies statewide
(Applies statewide - regardless of the age of the roof.  Flat roofs typically include those with coverings of hot tar and gravel/stone referred to as built up roofs ( BUR); modified bitumen; PVC single ply membrane, rubber membrane (EPDM), TPO membrane or silicon spray.)
Additional Requirements: (New)
·       All roofs 20 years old or greater require proof of acceptable condition and maintenance prior to binding coverage. Applies statewide.
·       Mandatory Coverage 42 – ACV loss settlement for Roofs for Wind and Hail perils only. (Not applicable to GrandProtect® or PlatinumSM homeowners policies.)
      Homeowner policies written under RPP owners forms or the Landlords Rental Dwelling form within the following territories must be written with   
      Coverage 42 (form HP4131).
                       Applies in territories 20, 33, 34, 35, 36, 37,38. 39, 40, 41, 42, 43, 44, 61, 65, 69, 71, 72, 73, 76, 77, 81, 84, 85, 87, 88 and 89
Removal of Minimum Value References
During discussion with the TDI they asked us to remove the references to minimum values previously noted in our Product chart on page 6 of the guidelines.  This was based upon regulation 28 § 21.1006(c) which prohibits declinations of residential property insurance based on a minimum value of the property sought to be insured.   Applies statewide.
When are these changes effective?
Mandatory Coverage 42 will be required on new business applications in the designated territories written on or after on 5/1/2017.  For existing customers: We will attach Coverage 42 beginning with mid-June renewals and will provide notice of the replacement renewal policy terms through an explanatory customer communication and a ‘soft’ non renewal notice as required by Texas law or regulation.
The Roof Depreciation Schedule and associated rate and forms filing is dependent upon TDI approval and successful installation.  Additional communication will be forthcoming upon program approval to announce the actual implementation date.
What else should I know?
As always our revised underwriting guidelines will be updated and stored for viewing in the CWU shared drive, in KANA, and on the Producer News Portal in ARS.  For your convenience, a copy of the approved version of our guidelines is attached to this communication.  We have highlighted the changes for your convenience.
The CUES team will provide the necessary messaging applicable to the mandatory inclusion of Coverage 42 in the specified territories for new business effective on 5/1, and they will also provide the messaging to support the temporary suspension of new business under GrandProtect or Platinum policies.
Frequently Asked Questions
1.     When do we start including Coverage 42 to new business and how does it work? What about renewals?
This begins on 5/1/2017. Agents will see the CUES messaging aligning mandatory Coverage 42 in the designated north Texas territories and will not be able to bind new policy applications for RPP owners or LRD without including Coverage 42. The company will add Coverage 42 to all renewals in the designated territories starting with mid-June renewals. 
2.     How long will Coverage 42 apply to new and renewal customers’ policies?
This is intended to be an immediate, but temporary measure until the Roof Depreciation Schedule filing is approved and that project is installed.  When RDS is approved it will replace mandatory Coverage 42 on new business.  We will then eliminate the requirements in our guidelines for mandatory Coverage 42 and expire the new business Coverage 42 CUES rules as they will no longer be necessary once RDS is in place.  Once TDI approval for RDS is received we will also cease applying Coverage 42 to renewal policies coincident with the date we begin applying RDS to renewals. Those customers whose renewals would have had Coverage 42 attached will go through to their next renewal in 2018 at which time their policies will renew with the Roof Depreciation Schedule.  
3.     When will the new Roof Depreciation Schedule (RDS) become effective for new business and renewals?
The date is entirely dependent on TDI approvals of the rate and forms filing. Typically new business goes first and renewal processing follows within 40 days.
4.     How long will current GP/Platinum renewal customers retain their replacement cost coverage for roofs?
Customers will continue to have their replacement cost loss settlement on roofs until that coverage is replaced at their next renewal date by either Coverage 42 or the Roof Depreciation Schedule once it is approved. Eventually all renewal policies in the designated territories will cycle through until they all convert to RDS. 
5.     Why didn’t we rollout RDS in one step rather than doing Coverage 42 ACV first and then RDS?  
The poor performance of this segment of business demanded an urgent action be taken to address the drain on earnings.  Coverage 42 is an immediate measure to fill the gap with ACV coverage on roofs for wind and hail perils, until we have received TDI approval and begin the implementation of RDS. 
6.     Are we offering any buy-back of replacement cost with ACV or RDS? 
      No. The direction we need to move in responding to loss pressure through a change in roof loss settlement policy terms will not include availability of a
      replacement cost buy back for roof losses caused by wind and hail. 
7.     What does Coverage 42 – ACV apply to? 
      The Actual Cash Value Settlement applies to the following types of property:
a. aerials, antennas and awnings;
         b. cesspools, septic tanks and septic fields;
         c. outdoor equipment and swimming pools;
         d. structures that are not buildings;
         e. wall-to-wall carpeting unless Replacement Cost on Contents for COVERAGE C - PERSONAL
    PROPERTY applies;
f. household appliances unless Replacement Cost on Contents for COVERAGE C - PERSONAL
    PROPERTY applies; and
g. roof surfacing of building structures if a loss to the roof surfacing is caused by the perils of wind
    or hail
8.     How will mortgage companies treat these changes? 
      This is largely dependent on each lender, however their interest in the property is still fully protected. We anticipate that most mortgage companies will
      acknowledge that and will understand this coverage change is limited to settlement of claims caused by wind and hail roofs and view it as a form of higher
      ‘deductible’ where the insured participates more in the loss. 
9.     Will claims be settled differently when comparing with Coverage 42 and ACV loss settlement vs.& RDS?
       The ACV settlement process is tied to the method that we currently use to depreciate the roofing materials.
   For Coverage 42/ACV Loss Settlement the adjuster will input the age and condition of the material noted upon inspection into the 
   estimating software to generate the depreciation rate and ACV amount.
With the RDS the adjuster will use the contract schedule as it applies to roof material type and age of roof to determine the depreciation percentage, then simply input the percentage indicated into the estimating software to generate the “depreciation/ACV”.  RDS won‘t negatively impact time service, and because the schedule isa component of the policy the customer will be able to actually know what to expect from claims based on the age and type of their roof.
10.  Will new customers have to send in additional documentation on their roof age with ACV or RDS?                                      
No additional documentation will be required beyond that which is customarily provided during the application process today.
11.  How can our agents know what customers are being impacted by the RDS or Coverage 42 changes? 
Agents can connect directly with their RSM for assistance and policy listings. 
Who should I contact if I have questions?
Agents should check with their RSMs.

Susan Upshaw, CIC
Select Insurance Markets, LP.
(281)350-8366(281)350-8366 Direct or 1-800-489-25011-800-489-2501 X126 Toll Free
(713)204-0283(713)204-0283 Cell
(281)651-1139 Fax
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