As the premium finance market place has grown and developed over the last five years their have been a variety of premium finance programs that have come and gone. From the days of non-recourse - not requiring an insured to post any collateral or sign a personal guarantee, allowing the policy's value to represent the total collateral posted for the loan, to the return and further development of programs that require 100% collateral, much has happen in this burgeoning industry.

Following the end of the non-recourse premium finance days, most advisors and premium finance lenders took from six months to a year off to regroup and recalibrate their programs based on the feedback given by the insurance carriers and self regulating industry organizations. This feedback addressed many of the flaws with the previous non-recourse programs, flaws including illegal rebating, lacking insurable interest and the need for consideration or "skin in the game" from the insured. As a result, the majority of the lenders made the necessary changes, integrated the suggestions from the carriers and produced compliant, transparent premium finance programs.

Today it is important to ensure that all programs that you are considering have been reviewed and are allowed by the insurance carriers. Although most insurance carriers will not give their full stamp of "approval" to a program that was created by an outside vender, they will review the program and if it is not rejected by their compliance team, they will allow their products to be used in conjunction with the program. This is assuming that the insured/policy owner discloses that they are financing the premiums, meets the financial requirements and the case has the proper estate planning rational.

To learn more about approved programs, please contact us today.