Assurant 2012 Annual Report Download - page 133

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ASSURANT, INC.2012 Form10-K F-57
24 Commitments and Contingencies
In the normal course of business, letters of credit are issued primarily to
support reinsurance arrangements in which the Company is the reinsurer.
ese letters of credit are supported by commitments under which the
Company is required to indemnify the  nancial institution issuing the
letter of credit if the letter of credit is drawn.  e Company had $19,760
and $24,296 of letters of credit outstanding as of December31, 2012
and 2011, respectively.
In February2012, the Company and two of its insurance company
subsidiaries (American Security Insurance Company and American
Bankers Insurance Company of Florida) received subpoenas from the
New York Department of Financial Services (the “NYDFS”) regarding
the Company’s lender-placed insurance business and related document
retention practices. In response to the subpoenas, depositions were
conducted in late February involving designated witnesses for the
Company and the subsidiaries. In March2012, the Company received
an additional request from the NYDFS for further information relating
to the Company’s lender-placed insurance program in New York and
responded in April. Along with other companies in the industry, the
Company participated in public hearings conducted by the NYDFS
in mid-May.  e Company was subsequently served with an order by
the NYDFS requiring the Company to propose and justify amended
rates for its lender-placed insurance products sold in the State of
New York by July6, 2012.  e Company submitted a response to
the order and has since engaged in discussions with the NYDFS and
provided additional information concerning the Company’s lender-
placed insurance program in the State of New York.  e Company’s
discussions with the NYDFS are continuing.
For additional information on the potential e ects of the outcome of
the Company’s discussions with the NYDFS and the potential e ects
of actions that may be taken by other states, please refer to “Item
1A—Risk Factors” in this report.
e Company is involved in litigation in the ordinary course of business,
both as a defendant and as a plainti . e Company may from time
to time be subject to a variety of legal and regulatory actions relating
to the Company’s current and past business operations. Although
the Company cannot predict the outcome of any pending or future
litigation, examination or investigation, it is possible that the outcome
of such matters could have a material adverse e ect on the Company’s
consolidated results of operations or cash  ows for an individual
reporting period. However, based on currently available information,
management does not believe that any pending matter is likely to
have a material adverse e ect, individually or in the aggregate, on the
Company’s  nancial condition.