Apparatus and method for providing collateral construction loan insurance coverage
First Claim
1. An apparatus for initiating, maintaining, and reporting collateral loan insurance for construction loans made by a lending institution to at least one construction contractor, comprising:
- a central electronic complex maintaining a database of collateral insurance provided by an insurance carrier under a single builder'"'"'s risk policy for a plurality of construction loans originated by a lending institution for projects constructed by one or more builder;
insurance carrier communication means for accessing the electronic complex to provide insurance rate information and to obtain reports about collateral insurance for the construction loans;
lending institution communication means for accessing the electronic complex to initiate, maintain, and report on collateral insurance for construction loans provided by the lending institution to the builders under the single builder'"'"'s risk policy; and
reporting means for reporting to the insurance carrier and to the lending institution information about the collateral insurance.
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Accused Products
Abstract
A centralized automated apparatus for lending institutions to initiate, report and confirm insurance coverage on buildings used as collateral for construction loans under a single builder'"'"'s risk policy provided by an insurance provider with the lending institution named as the named insured and the borrower/builder named as additional insured. Coverage rates are computed for construction loans added to the system by the lending institution using rate information provided by the insurance provider. Premium payments are transferred from the lending institution to the insurance provider for active loans from escrowed construction loan proceeds. The apparatus provides management reports for the lending institution and the insurance provider of new loans, active loans, funds transfers for reconcilation, premium payments and repayments for closed loans, and loss evaluations. A method of centrally providing collateral coverage for construction loans from a lending institution to builders under a single policy from an insurance provider is disclosed.
94 Citations
13 Claims
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1. An apparatus for initiating, maintaining, and reporting collateral loan insurance for construction loans made by a lending institution to at least one construction contractor, comprising:
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a central electronic complex maintaining a database of collateral insurance provided by an insurance carrier under a single builder'"'"'s risk policy for a plurality of construction loans originated by a lending institution for projects constructed by one or more builder;
insurance carrier communication means for accessing the electronic complex to provide insurance rate information and to obtain reports about collateral insurance for the construction loans;
lending institution communication means for accessing the electronic complex to initiate, maintain, and report on collateral insurance for construction loans provided by the lending institution to the builders under the single builder'"'"'s risk policy; and
reporting means for reporting to the insurance carrier and to the lending institution information about the collateral insurance.
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2. An apparatus for initiating, maintaining, and reporting collateral loan insurance for construction loans made by a lending institution to at least one construction contractor, comprising:
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a central electronic complex maintaining a database of collateral insurance provided by an insurance carrier under a single policy for a plurality of construction loans originated by a lending institution for projects constructed by at least one builder;
a microprocessor-based work station provided to the insurance carrier for accessing the electronic complex;
means for the insurance carrier to provide insurance rate information to the electronic database and to obtain reports therefrom about collateral insurance coverage for the construction loans;
means for the lending institution to initiate and maintain collateral insurance for construction loans provided by the lending institution to the builders; and
reporting means for reporting to the insurance carrier and to the lending institution information about the collateral loan coverage provided under the single policy.
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3. A method of centralized initiation with a computer system, maintenance, and reporting of collateral insurance for construction loan portfolio held by a lending institution, comprising the steps of:
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(a) calculating an insurance rate for a construction loan provided by a lending institution to a builder using rate information provided by a insurance carrier;
(b) initiating insurance coverage under a single builder'"'"'s risk policy provided by the insurance carrier to the lending institution by adding to a central coverage database identifying indicia related to the construction loan and builder;
(c) providing premium payments for the insurance coverage from the lending institution to the insurance carrier on behalf of the builder holding the construction loan with the lending institution;
(d) confirming insurance coverage by the insurance carrier to the lending institution for the construction loan to the builder under the single policy provided by the insurance carrier to the lending institution. - View Dependent Claims (4, 5, 6, 7, 8, 9, 10, 11, 12)
providing to the database loss information by the insurance carrier relating to claims made by the builder against the insurance coverage; and
generating loss reports for evaluation of insurance coverage.
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5. The method as recited in claim 3, further comprising the step of reconciling funds transfer from the lending institution to the insurance carrier with existing loans subject to collateral insurance policy.
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6. The method as recited in claim 3, further comprising the steps of:
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updating the database with paid loan information; and
computing premium return for paid loans.
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7. The method as recited in claim 6, further comprising the step of transferring premium return for paid loans from the insurance carrier to the lending institution.
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8. The method as recited in claim 7, further comprising the step of reconciling by the lending institution the premium return paid by the insurance carrier with paid loans.
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9. The method as recited in claim 3, further comprising the step of generating a management report of loans added to the single policy by the lending institution during a selected period.
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10. The method as recited in claim 3, further comprising the step of generating a management report of loans for which collateral insurance coverage is provided to builders under added the single policy by the lending institution during a selected period.
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11. The method as recited in claim 3, further comprising the step of removing closed loans from the active loans subject to collateral coverage by the single policy.
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12. The method as recited in claim 11, further comprising the step of generating a management report of loans closed by the builder during a selected period, whereby premium repayments from the insurance carrier are reconcilable by the lending institution with the closed loans.
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13. A data processing system for lending institutions to initiate, report, and confirm insurance coverage for buildings used as collateral for construction loans, comprising:
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means for maintaining a portfolio of building projects which are collateral for loans by a lending institution to finance the construction thereof, which buildings are subject to insurance coverage to reduce the risk to the lending institution against loss thereof, said insurance coverage provided by an insurance carrier to the lending institution as a single policy with the lending institution;
means for determining insurance premiums for the building projects included within the portfolio;
means for transferring funds by the lending institution for the insurance premium for each building project in the portfolio from a construction loan account associated with each building to a trust account for the insurance carrier;
means for transferring periodically the accumulated funds for insurance premiums from the trust account to the insurance carrier; and
means for reporting the status of projects and insurance coverage therefore.
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Specification