IN TWO recent opinions, the New York Insurance Department reaffirmed its longstanding view that debt cancellation and debt suspension agreements, made by many banks in connection with installment loans, are insurance contracts.
Significantly, the Insurance Department stated that these contracts are subject, at least to some extent, to regulations governing the sale of insurance. As one of the leading regulators of insurance in the U.S., the department’s views are influential, but these pronouncements raise new questions about the role of banks in the insurance marketplace.
