In a challenging professional indemnity market, the API is always looking for favourable PII policy terms for its Members. Through continued discussions with Woodina, Michael Wood, has informed us, for renewal of policies, the following relaxation of lender restrictions will be in place:
Banks, Building Societies and Credit Unions
Since mid 2020 Woodina has applied:
- an LVR cap restriction, and
- a $1m any one claim ($2m in all) sublimit
in respect of development valuations involving more than two dwellings provided to banks, building societies and credit unions (Banks).
In order to assist API Valuer Members, Woodina is now removing both of these development valuations restrictions as they apply to Banks, as risks come up for renewal.
Tier A Non-Bank Lenders
Since 1 June 2020 Woodina has relaxed its position in respect of Tier A Non-Bank Lenders (Pepper, Resimac, La Trobe, Liberty, Bluestone, and First Mac). This position is unchanged.
- There is no LVR restriction on residential mortgage valuations up to $3.5m or a commercial mortgage valuation up to $5m.
- There is a 70% LVR restriction for residential mortgage valuations over $3.5m and commercial mortgage valuations over $5m.
There is cover for [residential] development valuations:
- involving more than two dwellings, up to valuations of $2m, and
- where the lender applies an LVR no higher than 65%.
Please note: Woodina appreciates that there might be no link between the LVR and the cause of the loss the subject of the claim, but the exclusion applies nonetheless and needs to be emphasised to the lender in the valuation report.
Tier B Non-Bank Lenders
Woodina remains concerned about the higher risk associated with non-bank lenders that are not classed as Tier A Non-Bank Lenders. The position is unchanged.
For these Woodina still does not cover development valuations involving more than two dwellings, and excludes cover generally for mortgage valuations provided to a Tier B Non-Bank Lender where the lender applies an LVR over 70%. Note, this restriction should be emphasised to the lender in the valuation report or even better, in a covering email before accepting instructions from the lender.
If you have any questions, please contact your broker or Woodina.
View previous member communication with Woodina.
Posted on May 31, 2022