The formal proposal is scheduled to be issued this summer, according to Kevin McKechnie, ABIA executive director.

At the same time, New York insurance regulators announced that they are ramping up the pressure on insurers who provide so-called "force-placed" coverage.

First, New York is demanding a detailed accounting of the expenses, claims payments and profits of nine insurance groups it says are involved in the business in New York, and telling them it plans a hearing in May on the issue.

The hearing, according to Benjamin Lawsky, New York superintendent of Financial Services, will focus on whether rates are excessive and to probe payments between insurers, brokers, agents and mortgage servicers.

DFS officials were unavailable for comment on the exact date the hearing will be held.

The probe appears to be part of New York's intensive efforts to reduce the rate of foreclosures in the state. "The high cost of force-placed insurance adds to struggling homeowners' debt burden and makes it even more difficult for them to avoid foreclosure," Lawsky says.

"The high cost also harms investors in mortgages or mortgage-backed securities, because servicers advance the insurance payments and then recoup those payments out of investment income before investors are paid," he adds.

The insurers whom the department is requiring to submit data include Balboa Insurance Company, QBE Insurance Corporation, QBE Financial Institution Risk Services, Inc. All of these companies are units of QBE, an Australian company which has offices in New York and California.

Other insurers include American Security Insurance Company and American Bankers Insurance Company of Florida, both subsidiaries of Assurant; Meritplan Insurance Company, Irvine, Calif.; American Modern Home Insurance Company, Cincinnati, a unit of Munich Re; Empire Fire and Marine Insurance Company, Omaha, Neb., a unit of Zurich; and Fidelity and Deposit Company of Maryland, Schaumberg, Ill., another Zurich subsidiary.

Both Assurant subsidiaries are part of the Assurant Specialty Properties, based in Atlanta.