HUD accepts new rating service seal of approval for loan guarantee program

Before Jan. 1 of this year, none of the 24 risk retention groups formed in the last three years to provide professional liability coverage to nursing home owners and operators were eligible for the U.S. Department of Housing and Urban Development's Section 232 program, which provides HUD-guaranteed loans for construction or rehabilitation of long term care facilities.

This was because of HUD's requirement that professional liability coverage had to be obtained from a carrier rated "B-double-plus" or better by A.M. Best. Since Best typically requires five years of operation before assigning a letter rating, none of the RRGs could meet the requirement.

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