Lender Placed Insurance - Sources Sought Notice 19AUG2025.pdf

Lender-Placed Insurance SSN Page 1

UNITED STATED DEPARTMENT OF AGRICULTURE

RURAL DEVELOPMENT

1400 INDEPENDENCE AVENUE, S.W.

WASHINGTON, DC 20250

SOURCES SOUGHT NOTICE: LENDER-PLACED INSURANCE

August 19, 2025

1.0 Description

The U.S. Department of Agriculture, Rural Development (RD), is issuing this Sources Sought Notice (SSN) to improve RD’s understanding of market capabilities and identify qualified vendors capable of providing Lender-Placed Insurance to a federal agency. Responses to this SSN will help identify the market conditions for this type of requirement.

THIS IS A SOURCES SOUGHT NOTICE. This is not a Request for Proposal (RFP) or Request for Quote (RFQ). This request for capability information does not constitute an RFP or RFQ and does not commit the Government to contract for any supply or service, whatsoever. Further, the USDA, RD is not at this time seeking proposals or quotes and will not accept unsolicited proposals or quotations. Submission of any information in response to this market survey is purely voluntary.

However, responses received will assist the Government if solicitation is issued in the future. The government assumes no financial responsibility for any costs incurred associated with this request for capability information. Not responding to this source sought does not preclude participation in any future RFP or RFQ, if any is issued. Potential offerors are responsible for monitoring government websites such as GSA or SAM for any potential opportunities. Responses do not guarantee an award nor exclude/include your company in any potential acquisition process. No feedback or evaluations will be provided to companies regarding their submissions.

This SSN is being used as a Market Research tool for informational purposes and for preliminary planning purposes to identify potential sources that can provide Lender Placed Insurance on properties financed through RD housing programs to mitigate risk to RD’s portfolio of properties when the borrowers fail to provide adequate insurance themselves.

2.0 Purpose

The objective of the USDA, RD regarding this SSN is to obtain information from industry capability statements and SSN responses to questions on providing Lender-Placed Insurance to a federal agency.

All interested and qualified businesses (i.e., Small Business, Other than Small) are encouraged to respond to this notice in accordance with the instructions addressed herein.

Please see the attached Performance Work Statement (PWS) with specific tasks and period of performance.

Lender-Placed Insurance SSN Page 2

3.0 Question Submission

Interested parties, who consider themselves qualified sources that can provide Lender-Placed Insurance to a federal agency are invited to provide a written response to the questions in Exhibit A below and electronically submit your responses to sora.jung@usda.gov.

3.1 Responses:

Submission Instructions: Interested parties are encouraged to respond to this SSN. All communications shall be in writing and submitted electronically via email to Sora Jung, Contract Specialist, at Sora.Jung@usda.gov and Lawanda Henry, Contracting Officer, at Lawanda.Henry@usda.gov. No information will be taken by phone. Written responses should be delivered in MS Word (doc) and/or Portable Document Format (PDF) and are due no later than 10:00 AM ET September 3, 2025. Your entire submission should be limited to 5 pages (8x11), single spaced, 12-point font minimum and should be separated by Sections. Proprietary information, if any, should be minimized and MUST BE CLEARLY MARKED with (PR) nomenclature at the start of each paragraph. Please be advised that all submissions become Government Property and will not be returned. Do not submit a cost proposal.

Exhibit A: Please provide the following information in your submission:

1. Name of Company/Organization

2. Company/Organization Address

3. Company/Organization Website URL

4. Point of Contact (POC) Name:

5. POC Email Address:

6. POC Phone Number:

7. System for Award Management (SAM) Unique Entity Identifier (UEI) (An offeror must have a UEI and be registered in SAM by the time of award.)

8. Commercial and Government Entity (CAGE)

9. GSA Multiple Award Schedule Contract Number and Expiration Date, if applicable

10. Indicate the size classification of your Company/Organization.

a. Small Business (SB)

b. Other Than Small Business

11. Indicate the socio-economic status of your Company/Organization.

mailto:sora.jung@usda.gov mailto:Sora.Jung@usda.gov mailto:Lawanda.Henry@usda.gov

Lender-Placed Insurance SSN Page 3

a. SBA-Certified Small Disadvantaged Business (SDB)

b. Woman-Owned Business

c. Economically Disadvantaged WOSB (EDWOSB)

d. Veteran-Owned Small Business (VOSB)

e. Service-Disabled Veteran-Owned Small Business (SDVOSB)

f. SBA-Certified HUBZone (HUBZ) Firm

g. SBA-Certified 8(a)

h. Alaska Native Corporations (ANC) Tribal, American Indian, Native Hawaiian

(NHO)

i. None

j. Other

12. In your estimation, how much of this potential requirement would your

Company/Organization need to subcontract to other companies?

a. None

b. Up to 15 Percent

c. Between 15 and 30 Percent

d. Between 30 and 50 Percent

13. Are there any existing contracting vehicles that this could be solicited under to include

GSA’s Federal Supply Schedules or other Government-Wide Agency Contracts (GWACs)?

a. Yes

b. No

14. If GSA, what would be the appropriate category/Multiple Award Schedule to solicit?

15. Based on the information provided, would your Company/Organization submit a proposal if this requirement was issued under your GSA Contract?

16. What other information, if there is any, would be necessary to have to prepare a proposal?

3.1 Corporate Experience:

Description of your company’s capabilities as they relate to the PWS. Within the company’s description, please include the company’s previous experience (commercial and/or federal) providing lender-provided insurance as described in the PWS. The experience(s) may include services provided as a teaming or subcontractor to another business.

Your capability statement should provide responses to the questions listed in Exhibit A of this document and any additional information to substantiate your demonstrated capability to provide Lender-Placed Insurance to a federal agency. Fax submissions will not be accepted. Responses

Lender-Placed Insurance SSN Page 4 received after this date and time may not be considered in the Government's market research.

Respondents are advised that the Government is under no obligation to acknowledge receipt of the information submitted. Respondents will not individually be notified of the results of the Government assessments and should not anticipate feedback regarding its submission.

4.0 Summary

The information provided in the sources sought is subject to change and is not binding on the Government. The USDA, RD, has not made a commitment to procure any of the services discussed, and release of this SSN should not be construed as such a commitment or as authorization to incur cost for which reimbursement would be required or sought.

PERFORMANCE WORK

STATEMENT (PWS)

FOR

LENDER-PLACED

INSURANCE SERVICES

Table of Contents Section 1: Introduction

1.0 Background and Purpose

1.1 Period of Performance

1.2 General Information

1.3 Changes to the PWS

Section 2: Definitions and Acronyms

Section 3: Government Furnished Property and Services

Section 4: Contractor Furnished Property and Services

4.1 Technical Requirements/Tasks

4.2 Key Personnel

4.3 Security Requirements

4.4 Data Rights

Section 5: Specific Tasks

5.1 Lender-Placed Insurance

5.2 Inspections

5.3 Check Processing

5.4 Mail Service

5.5 Loss Processing

5.6 Flood Determinations

5.7 Information Management System (IMS)

5.8 Training

Section 6: Attachments

1. Introduction

1.1. Background and Purpose: The United States Department of Agriculture (USDA) Rural Development (RD) provides loans to low and moderate-income applicants located in rural geographic areas to assist them in obtaining single/guaranteed/multi-family housing through various programs. As of May 1, 2025, the Government had approximately 185,000 Direct Single-Family Housing Loans. Section 502 Direct Single-Family Housing loans (Direct Loan Program) are approximately 99% escrow and are generally secured by first mortgages on modest dwellings located on non-farm tracts of one acre or less. The Single-Family Housing Direct loans are in each of the 50 states and U.S. territories that include Puerto Rico, and the US Virgin Islands. Since multiple loans may exist on a single property, an escrow account must only be established on the primary loan. Approximately 6,500 new single-family loans are originated per year.

USDA RD currently processes all loan originations through state offices and approximately 436 field offices. USDA RD offices located in St. Louis, Missouri provides support to the field offices for loan originations and is responsible for most servicing functions. Currently the Single- Family Direct loan program is approximately 99% escrow and the Hazard and Flood Compliance Section tracks 100% of the customers that are required to maintain a hazard, windstorm or flood insurance policy. As of May 1, 2025, USDA RD had 12,990 Multi-Family Housing projects with total units encompassing approximately 398,000 units and a total of 20,949 loans.

Currently, Multi-Family Housing loans are not escrowed. USDA RD Multi-Family Housing programs provide several finance options to developers of low-income community housing.

1.2. Objective: The purpose of this requirement and is to provide Lender Placed Insurance on properties financed through RD housing programs to mitigate risk to RD’s portfolio of properties when the borrowers fail to provide adequate insurance themselves.

1.3. Period of Performance (PoP): The performance period for this PWS will be one (1) base year plus four (4) option years for a potential overall contract performance of five (5) years. Total performance period is as follows:

Base Year - 30 December 2025 through 29 December 2026.

Option Year 1 - 30 December 2026 through 29 December 2027.

Option Year 2 - 30 December 2027 through 29 December 2028.

Option Year 3 - 30 December 2028 through 29 December 2029.

Option Year 4 - 30 December 2029 through 29 December 2030.

1.4. General Information

1.4.1. Quality Control: Quality Control is the responsibility of the Contractor. The Contractor is responsible for the delivery of quality services/supplies to the Government.

1.4.2. Quality Control Program (QCP): The Government is committed to an interactive relationship between Contractor quality control and Government quality assurance. This relationship shall be achieved through an effective prevention-based Quality Control Program dedicated to ensuring the best possible products and services to USDA RD. The Contractor shall provide their final written QCP no later than (NLT) 10 days after contract award and within five (5) days of any proposed changed to the COR and CO.

1.4.3. The Contractor’s quality program shall demonstrate its prevention-based outlook by meeting the objectives stated in the PWS throughout all areas of performance. The QCP shall be developed to specify the Contractor’s responsibility for management and quality control actions to meet the terms of the contract. The QCP as a minimum shall address continuous process improvement; procedures for scheduling, conducting and documentation of inspection; discrepancy identification and correction; corrective action procedures to include procedures for addressing Government discovered non-conformances; procedures for root cause analysis to identify the root cause and root cause corrective action to prevent re-occurrence of discrepancies; procedures for trend analysis; procedures for collecting and addressing customer feedback/complaints.

1.4.4. Within 24 hours of completion, upon request from the COR, the Contractor shall provide all reports generated as a result of the Contractor’s quality control efforts. This shall include any summary information used to track quality control, including any charts/graphs.

1.4.5. The Contractor’s QCP shall be incorporated into and become part of this contract after the plan has been accepted by the CO. Proposed changes made after CO acceptance shall be submitted in writing through the COR to the CO for review and acceptance prior to implementing any revision. The Contractor’s QCP shall be maintained throughout the life of the contract and shall include the Contractor’s procedures to routinely evaluate the effectiveness of the plan to ensure the Contractor is meeting the performance standards and requirements of the contract.

1.5. Contractor Discrepancy Report (CDR): When the Contractor's performance is unsatisfactory, a CDR will be issued. The Contractor shall reply in writing within five (5) business days from the date of receipt of the CDR, giving the reasons for the unsatisfactory performance, corrective action taken, and procedures to mitigate recurrence.

1.6. Quality Assurance (QA): The COR will evaluate the Contractor’s performance under this contract in accordance with the Quality Assurance Surveillance Plan (QASP). This plan is primarily focused on what the COR must do to ensure that the Contractor has performed in accordance with the PWS. When an observation indicates defective performance, the COR will require the Contractor acknowledgement of the observed defective performance. The acknowledgement of the observation does not constitute Contractor concurrence with the observation, only that the Contractor has been made aware of the defective performance.

1.7. Continuity of Services/Transition Plan: The Contractor shall be responsible for providing a transition plan which incorporates task, duties and responsibilities for both the phase-in and phase-out periods. The Contractor will provide the transition plan to the CO NLT 30 days after contract award.

1.8. Phase-in Plan: The plan shall clearly demonstrate a reasonable, realistic approach for assuming full contractual responsibility without disruption or degradation of performance during the transition period. The plan shall identify risk and proposes appropriate mitigation strategies. The Contractor’s plan shall propose a realistic, achievable and affordable transition schedule and staffing plan detailing an approach to ensure the availability of trained and qualified personnel experienced in the MortgageServ/LoanServ/FiServ systems.

1.9. Phase-Out Plan: The plan enables a smooth transition to replacement services and ensures no disruption in services when the existing contract performance period ends. The Contractor shall provide for phase-in support for up to 90 days to the selected Contractor if the incumbent Contractor is not selected herein. The incumbent Contractor will allow for the transfer of knowledge, experience and lessons learned to the new Contractor. Including, but not limited to, appropriately transfer all property, documentation, digital and hard copies of all in-progress working files, historical files, briefings for incoming personnel, timelines and standards for completion.

1.10. Disaster Recovery Planning: The Contractor may be required to work in the area of disaster recovery and continuity of operation. These duties include complying with NIST 800- 34 Contingency Planning Guide for Information Technology Systems, USDA Departmental Manual (DM 3570-001 Disaster Recovery and Business Resumption Plans) and RD or other USDA RD recovery plans for application/system recovery. These documents will be provided on request. This includes, but is not limited to, the development of application recovery steps;

testing, validating, reviewing recovered applications; and maintaining RD or other USDA RD applications in the event of a disaster. Disaster and recovery of applications processes should be implemented in the event of actual emergencies, i.e. pandemics, tornados, terrorist attacks, etc. or in simulations, i.e. exercises (tabletops or functional). Personnel assigned these duties should be listed on a call tree with the potential to be called 24/7. If personnel report to a physical office location, the personnel should have a telework agreement in place for disaster recovery.

1.11. Place of Performance

1.11.1. Work may be performed remotely.

1.12. Hours of Operation

1.12.1. The Contractor must be available to service the Servicing Office (operating out of central time zone) as well as the borrowers from all 50 states and U.S. territories that include Puerto Rico, and the US Virgin Islands.

1.13. Changes to PWS: Any and all changes to this PWS shall be authorized and approved only through written correspondence from the CO. Change requests will be monitored by the CO. No payments will be made for any unauthorized supplies and/or services or for any unauthorized changes to the work specified herein. This includes any services performed by the Contractor of their own volition or at the request of an individual other than the CO or appointed COR. Only the assigned CO is authorized to change the specifications, terms, and conditions under this effort. This contract is governed by federal law and will be construed accordingly.

1.14. Travel: Travel is not anticipated for this contract. But, if required, it must be cleared through the CO and RD before travel commences. Travel and per diem will be reimbursed in accordance with Federal Travel Regulations.

2. Definitions and Acronyms

CFR: Code of Federal Regulations.

CLIN: Contract Line-Item Number.

Contracting Officer (CO): The United States Government appointed person with the authority to enter into, administer, and terminate contracts on behalf of the United States Government.

Contracting Officer’s Representative (COR): The COR monitors all technical aspects of the contract and assists in contract administration. The COR is authorized to perform the following functions: assure the Contractor performs the technical requirements of the contract, performs inspections necessary in connection with contract performance, maintain written and oral communications with the Contractor concerning technical aspects of the contract, issue written interpretations of technical requirements, monitor Contractor’s performance and notify both the CO and Contractor of any deficiencies. The COR will perform other duties delegated by the CO in a letter of designation.

FAR: Federal Acquisition Regulation

FEMA: Federal Emergency Management Agency

Performance Work Statement (PWS): Statement of work for performance-based acquisitions that describe the required results in clear, specific, and objective terms with measurable outcomes.

PM: Program Manager, the Contractor personnel overall assigned for managing their personnel and assets. The Contractor may have an Alternate Program Manager (APM) as well.

PoP: Period of Performance

Quality Assurance Surveillance Plan (QASP): An organized written document specifying the surveillance methodology to be used for surveillance of contractor performance to assure services meets the requirements of the Performance Work Statement.

RD: Department of Rural Development.

Sagent/Sagent LoanServ: The USDA’s loan origination software system.

UPD: Unpaid Principle Balance

USDA: United States Department of Agriculture

3. Government Furnished Property and Services

3.1 The Government will provide designated employees to manually update the USDA’s mortgage servicing system. These employees also pay the monthly bill for the homeowner, flood, and windstorm policies and will review any discrepancies discovered.

3.2 The Government will provide designated employees to provide funds to the Contractor to fund the checks printed in section 5.4.

3.3 The Government will provide additional designated government employees to pay the monthly invoices for Mail Services, Flood Zone Determinations, and Property Inspections.

3.4 The Government will provide designated employees to monitor loss claims and disburse funds to the homeowner and Contractor for repairs.

3.5 The Government will provide a data file that contains customer information and insurance coverage information. The Contractor will use this information to determine when lender placed coverage is required. The Government will provide designated employees to facilitate the transfer of the file to the Contractor, and the transfer of the return file from the Contractor to

USDA.

4. Contractor Furnished Property and Services

4.1 Technical Requirements/Tasks: The Contractor shall provide all resources necessary to accomplish the requirements described in this PWS. The Contractor shall provide all personnel, equipment, supplies, facilities, transportation, tools, materials, supervision, and other items to manage Lender- Placed Insurance services for USDA RD. The services shall include lender-placed insurance, inspections of property damages, check printing, mail service of lender-placed insurance correspondence, loss processing, loss-drafts, flood determination, information management services for analysis reporting, and insurance tracking services. The Contractor shall continuously update and enhance information made available to USDA RD, technology and the performance of their overall service delivery, in a manner consistent with industry standards.

4.2 Key Personnel: Key personnel shall not be added to or removed from the contract without express acknowledgement of the COR. Any changes to the working status of these key personnel shall be transmitted (in writing) to the CO/COR within 10 business days of the proposed change. If, for any reason, any of the key personnel becomes, or is expected to become, unavailable for work under this contract for a continuous period exceeding 30 business days the Contractor shall promptly replace personnel with personnel who possess qualifications equal to or better than that of the original employee. The Contractor shall ensure all key personnel terminated or released from employment under this contract are replaced within 10 workdays of the termination.

The Contractor shall provide the following two (2) key personnel under this contract: Program Manager (PM), who shall be responsible for the performance of the work under this contract. The name of this person, and an Alternate PM (APM), who shall act for the Contractor when the PM is absent, shall be designated in writing to the COR and CO at the post award conference The PM or APM shall have full authority to act for the Contractor on all contract matters relating to daily operation of this contract.

The PM or APM shall be available between the hours of 7:30 AM to 4:30 PM CST, Monday through Friday, except recognized holidays or when the Government facility is closed for administrative reasons.

The PM/APM shall meet or exceed the following minimum qualifications: The PM/APM shall have at least five (5) years of experience in managing programs, training, and oversight for projects encompassing the tasks identified within Section 4.0 of this PWS.

4.3 Security Requirements: The Contractor shall sign a confidentiality agreement concerning the disclosure/nondisclosure of confidential information. The term confidential information means any information acquired by the Contractor in carrying out the duties under the contract, including any information obtained before the date of the contract, and which had not become public information, including information regarding the borrower personally identified information, USDA RD, and LoanServ System. Except as required by law or court order, the Contractor shall not disclose or permit the disclosure of any confidential information, including this and any other engagement with USDA RD to anyone without USDA RD's expressed written consent. USDA RD will provide the Contractor with access to electronic documentations, which may also be provided through printing of those documents, at the request of the Contractor. Access to these documents shall be under the control of USDA RD personnel.

Upon termination of this contract, all information, documents, and work products in the Contractor’s possession relating to any work performed under this contract shall be returned to the COR of this project. USDA RD will review and may authorize the vendor to retain copies of any information that the vendor reasonably considers necessary for its confidential business records. The Contractor shall take all reasonable measures to avoid at any time any unintentional or inadvertent disclosure of any confidential information to any unauthorized person by the Contractor’s employees, agents, or attorneys.

4.4 Data Rights: The Government has unlimited rights to all documents/material produced under this contract to the extent permitted by the data rights clause. The parties mutually acknowledge their understanding that this is the Government’s intent. All documents and materials, to include the source codes of any software, produced under this task order shall be Government owned and are the property of the Government with all rights and privileges of ownership/copyright belonging exclusively to the Government. These documents and materials may not be used or sold by the Contractor without written permission from the CO. All materials supplied to the USDA RD shall be the sole property of the

Government and may not be used for any other purpose. This right does not abrogate any other Government rights.

5. Specific Tasks

5.1. Lender-Placed Insurance: If USDA RD holds a mortgage on a Single-Family Housing or Multi- Family Housing loan, the Contractor shall provide a lender-placed policy until the Government’s interest in the property is satisfied or the customer provides proof of satisfactory insurance coverage.

Lender Placed Coverage shall insure the building structures from damage caused by applicable hazard. Coverage shall include all structures on the property. The lender placed coverage shall not cover personal liability or personal contents maintained either in or around the structure.

The coverage shall include a Replacement Cost Guarantee clause, ensuring all claims are paid based on replacement cost value. Mobile homes will be replacement cost only.

Deductibles greater than $750.00 for Single Family Housing and $1,500 Multi-Family Housing for this coverage must be accompanied by a justification and approved by the Government.

If the contract is not renewed or terminated, all policies shall remain in force until renewal and all claims shall be honored, unless policy cancellation is justified by underwriting regulations and sufficient notice has been communicated.

5.1.1. Coverage: The Contractor shall provide coverage with the parameters below:

5.1.1.1. Hazard Coverage: The Contractor shall provide a lender place policy if the 502 loan has a current principal balance that exceeds $7,500, or a Section 504-Loan Grant Program for repairs with an original principal balance greater than $15,000 but with a current principal balance greater than $7,500. The fire policy shall insure the structures from damage caused by reported hazards. The fire policy shall be issued for the last known hazard coverage or unpaid principal balance if last known coverage is unknown.

5.1.1.2. Flood Coverage: The Contractor shall provide a lender place policy if the 502 loan has a current principal balance that exceeds $5,000, or a 504 loan with an original principal balance or current principal balance greater than $5,000. The flood policy shall be issued for the last known hazard coverage or unpaid principal balance if last known coverage is unknown, not to exceed the maximum allowed under FEMA regulations.

5.1.1.3. Mobile Home Coverage: The Contractor shall provide a lender place policy if the 502 loan has a current principal balance that exceeds $7,500, or a Section 504- Loan Grant Program for repairs with an original principal balance greater than $15,000 but with a current principal balance greater than $7,500. The mobile home fire policy shall insure the structures from damage caused by reported hazards. The mobile home fire policy shall be issued for the last known mobile home coverage or unpaid principal balance if last known coverage is unknown.

5.1.1.4. Windstorm Coverage: The Contractor shall provide a lender place policy if the 502 loan has a current principal balance that exceeds $7,500, or a Section 504-Loan Grant Program for repairs with an original principal balance greater than $15,000 but with a current principal balance greater than $7,500. The windstorm policy shall insure the structures from damage caused by reported hazards. The windstorm policy shall be issued for the last known wind coverage or unpaid principal balance if last know coverage is unknown.

5.1.2. Coverage Lapse Resolution: USDA RD provides a daily transmission report identifying Government loans with a lapse in coverage. The Contractor shall immediately obtain coverage for all properties included in these transmissions.

5.1.2.1. Loans shall be fully covered through the Contractor and placed on an automatic binder for a minimum of 70 calendar days for fire (single family, multi-family, mobile home), or windstorm policies and a maximum of 60 calendar days for flood policies. During the binder period, the account shall not be charged with a premium and a separate binder fee shall not be assessed. If a borrower provides a policy within the binder period, they shall not be charged for lapse in coverage if the policy does not go back to the original effective date of the binder. Upon expiration of the binder period the Contractor shall ensure a policy is issued.

5.1.2.2. Lapses in coverage shall be paid only when a full premium has been disbursed by USDA RD and the borrower provides a policy that does not date back to the effective date of the lender placed policy (this policy shall be effective the date of the lapse of coverage date). The premium shall be calculated from the effective date of the policy and the policy shall remain in effect for a 12-month period.

5.1.2.3. The Contractor shall have the ability to back date a lender placed coverage up to 2 years.

5.1.2.4. Automatic Coverage Endorsement providing immediate full policy coverage for all loans when prior coverage has expired or been canceled along with an uninsured or underinsured loss.

5.1.3. Coverage Notification: During the binder period, the Contractor shall notify the borrower of the lapse in coverage and USDA RD’s intent to levy lender-placed insurance coverage via letter.

5.1.3.1. The Government requires issuance of notifications in compliance with 12 CFR

1025.37 sections (a) through (h) identifying three (3) notification letters for all coverage policies except flood coverage which requires two (2) notification letters.

5.1.3.2. Notification template will be on USDA RD letter head with the USDA Customer Service phone number / fax number, and mortgagee clause. USDA RD shall approve notification letter template prior to distribution.

5.1.3.3. Borrower information utilized for notification purposes shall not be used for any purpose outside the notification objective. Sale of the data is prohibited.

5.1.4. Premiums

5.1.4.1. Contractor shall submit a premium rate formula in the offeror’s proposal. The premiums for the lender-placed coverage shall follow a recognized regional rate or established state rates.

5.1.4.2. The Government will not require receipt of commission, nor will it seek reimbursement for any effort put forth in securing coverage for the property.

Refunds shall be payable to the Government within three (3) business days of policy termination.

5.1.4.3. If a premium has been paid to the Contractor and the borrower tenders a policy after the effective date of the lender placed policy, the Contractor shall return the unused/ pro-rated portion of the premium to the Government.

5.1.4.4. Premiums shall be pro-rated utilizing a straight-line method and a 365-day measure.

5.1.4.5. The Contractor shall provide a monthly loan level detail report of premium refunds. Report shall include the Government account number, policy number, borrower name, refund amount and the number of earned premium days.

5.1.5. Termination and Renewals

5.1.5.1. The Government has the right to terminate any policy placed on a given property without prior notice to the Contractor. Terminations shall occur when the Government has received appropriate proof of insurance, or the debt has been satisfied. Terminations shall be effective immediately upon notification, or an earlier effective date can be utilized if authorized by USDA RD.

5.1.5.2. All premiums shall be issued for a period of one year (twelve months) from the effective date of coverage.

5.1.5.3. The Government requires the Contractor to issue notifications to the borrowers in compliance with 12 CFR 1024.37 sections (e) through (h). The Contractor shall issue notifications to borrowers in compliance with 12 CFR 1024.37 sections (e) through (h).

5.1.6. Compliance: The Contractor shall interpret, understand and communicate legal and regulatory requirements that impact lender placed hazard and flood insurance. The Contractor shall actively monitor and track state and federal legislation and any litigation involving lender placed insurance to ensure compliance with laws and regulations impacting the insurance and mortgage servicing industry.

5.2. Inspections: The Contractor shall conduct property inspections to determine the progress/status of repairs required from damages to the property for all claims made on the lender placed policy as well as claims made on the borrowers preferred policy as directed by the USDA RD.

5.2.1. Photographic Evidence: The Contractor will provide photographic evidence in digital format as documentation of repairs made or needed.

5.2.2. Written Reports: The Contractor will provide a written report explaining discrepancies in completed work and the adjuster’s worksheet with a percentage of work completed.

5.3. Check Processing: The Contractor shall disburse payment to insurance vendors for non-EDI automated insurance payees. The Contractor requires authorization approval for each batch of check stock prior to use.

5.3.1. Check Reports: The Contractor shall provide a report of check usage in sequential order and identification of voided and destroyed checks with detailed explanation daily.

5.3.2. Digital Images: The Contractor will provide digital images of any checks that were returned by the postal service or rejected by the insurance company/agent at a minimum of twice weekly.

5.4. Mail Service: The Contractor will mail all notifications of lender placement of insurance for all perils in the event there is no coverage on a property. The Contractor will mail all renewal notifications of lender placed insurance for all perils. The Contractor will monitor the content of the letters to ensure compliance with all current regulations review content when there are new or modified regulations. The Contractor will mail all letters regarding revised flood zone determinations. The Contractor will mail loss claim packages on all lender placed losses to include all required forms necessary for completion of a claim and a copy of the full adjustor’s report. The Contractor will provide digital copies of all letters sent.

5.5. Loss Processing: If a loss occurs on a property insured under the lender placed policy, the claim draft and attached adjuster's worksheet shall be electronically transferred to USDA RD.

Contractor shall store borrower correspondence in an electronic format with retrieval at the account level, accessible to the Government.

5.5.1. Loss Drafts: The Contractor shall complete property inspection, Adjusters Work Sheet, and issue loss draft payable to the Government within 30 calendar days except claims in Federal declared disaster areas which shall be handled on a case-by-case basis. The contractor shall provide a monthly report for all claims in process for more than 30 days, indicating the reason for delay.

5.5.2. Claims Negotiations: Claim negotiations shall be between the borrower and Contractor. The Government shall only become involved when requested by the borrower, Contractor or in special cases. The Government shall file claims directly with the Contractor in instances of customer neglect, bankruptcy or foreclosure proceedings.

The Government shall have the right to submit supplemental property loss claims when access to the property prevented a full assessment of the damage. The Contractor shall not impose a time limit for filing a loss claim that is less than 365 days from the Government's receipt of notification of potential loss.

5.5.3. Lender Placed Loss Claims Tracking Report: The Contractor shall provide reports to the COR via email in a Microsoft Excel document.

5.5.3.1. Claims In-Process: Contractor shall provide a monthly report detailing claims in process that exceed than 30 days. The report will include the reason for the claims’ delays.

5.5.3.2. Claims Paid Report: Contractor shall provide a quarterly report for claims paid.

The report shall include borrower ID, claim numbers, and the date that claims were paid.

5.5.3.3. Borrowers with Multiple Claims: Contractor shall provide a semi-annual report detailing borrowers who have filed more than one claim.

5.5.3.4. Loss Claim Tracking System Access: The Government shall have online access to the Contractor's Loss Claim Tracking System. Information shall include claims in progress, status of the loss check, amount and check number, and case history.

5.6. Flood Determination:

5.6.1. Security/ID Database: The Contractor shall provide security access and maintain a user

ID data base of all USDA approved users to request flood zone determinations on new and existing loans.

5.6.2. Loan Monitoring: The Contractor will provide life-of-loan monitoring of FEMA’s Special Flood Hazard Area designations on all new loans when USDA is charged a fee for a flood zone determination certificate. The Contractor will monitor existing loans for changes to flood zones and will provide updated flood zone information on a monthly basis.

5.6.3. Reports: The Contractor shall provide a monthly report detailing determinations in process more than 30 days, indicating reason for delay.

5.7. Information Management System (IMS): The Contractor shall provide lender-placed insurance IMS should improve the efficiency and timeliness of coordination between offices, improve efficiency and quality of mandated reporting to USDA. An integrated IMS with LoanServ/FiServ specifications is required to capture the necessary reporting and auditing inherent in the task requirements of this PWS. The IMS will have the capabilities listed below.

5.7.1. Role-Based Security: Provide role-based security access for all applicable users of the IMS. Customizable user access, including workflow responsibilities/restrictions, file sharing, report generation, tracking, reporting/publishing features suitable for USDA RD accounting processes and internet-bases loss draft services. Transform data into formats required for financial reporting and audit management, including tables, charts, graphics, and text. Tool loads data and formats into report layouts.

5.7.2. Integration With RD Systems: Documents within the IMS shall be fully integrated with LoanServ specifications to avoid data integrity issues. The IMS must provide for integrated report writing, provide standard reports or templates and permit input of USDA RD specific reporting templates. Scheduled report generation is required and requested on a quarterly, bi-annual and annual basis. Information for reporting will require access to existing USDA RD data and reporting fields as determined by USDA RD.

5.7.3. Dashboards: Provides access dashboards that are user-friendly, intuitive, and accessible. The IMS shall have the capability to link data automatically from source input to online dashboards. Reports and dashboards shall have the ability to automatically update based on source data by the borrower, Contractor, or USDA RD.

5.7.4. Useability: The IMS shall provide users the tools necessary to perform file claims.

These include the following:

• Filing claims and loss draft tracking.

• The IMS shall manage the workflow tracking of audits, preliminary reports, draft reports, final reports, findings, recommendations, and responses, action plans, and follow-up documents.

• Ability to generate and export data, reports, and documents to a corresponding Microsoft-type format (Excel, PowerPoint or Word), and to PDF format.

• Capability to designate information as active, complete, or historic information.

5.8. Training: Contractor shall provide comprehensive virtual training for USDA Rural Development Insurance Staff at minimum 2 sessions per year and maximum of 4 sessions per year. Training is to include insurance industry claim processing, laws and regulations surrounding lender placed insurance, and any pertinent information regarding mortgage loan servicing as it relates to the insurance industry.

6. Attachments

Attachment A: Work Breakdown Structure

5.6 Flood

Determination

5.7 Information

Management

System

5.8 Insurance

Tracking Services

5.9 Training

5.1.2 Provide

Coverage

5.2.1 Photgraphic

Evidence

5.5.1 Loss Drafts

5.6.1 Security/ID

Database

5.7.1 Role-Based

Security

5.8.1 Information

Review

5.1 Lender-Placed

Insurance

5.2 Inspections

5.3 Check

Processing

5.4 Mail Service 5.5 Loss Processing

5.8.2 Reports

5.5.3 Lender-Placed

Loss Claims

Tracking Reports

5.6.3 Reports

5.7.2 Delinquent

Search on Non- Escrow Loans

5.5.2 Claims

Negotiation

5.6.2 Loan

Monitoring

5.3.1 Check

Reports

5.3.2 Digital Images

5.7.3 Dashboards

5.7.4 Useability

5.7.5 Training

5.1.3 Coverage

Notification

5.1.4 Premiums

5.1.5 Termination

and Renewals

5.1.2 Coverage

Lapse

5.2.2 Written

Reports

5.1.6 Compliance

Attachment B: Key Deliverables/Schedule

Item # Deliverable/ Item Title

PWS

Paragraph

Frequency Delivery Format Due By

1 Lender-Placed Insurance Status Report

5.1 Monthly Submitted to the

COR via email.

5th day of each month upon contract award.

2 Coverage Report

5.1.1 Monthly Submitted to the

COR via email.

5th day of each month upon contract award.

3 Coverage Lapse Resolution Report

5.1.2 Monthly Submitted to the

COR via email.

5th day of each month upon contract award.

4 Premium Rate Formula

5.4 Once Submitted to the

COR and CO via email.

Within 10 days of contract award.

5 Premium Refund Report

5.1.4.5 Monthly Submitted to the

COR via email.

5th day of each month upon contract award.

6 Property Inspections / Check Processing Reports

5.2 Monthly Submitted to the

COR via email

5th day of each month upon contract award.

7 Loss Claims Tracking Report

5.5.3 Monthly Submitted to the

COR via email.

10th day of each month upon contract award.

8 Flood Determination Report

5.6.3 Monthly Submitted to the

COR via email.

5th day of each month upon contract award.

9 Information Management System

5.7 Continuously Via app/URL

accessible to SO personnel with need-to-use basis.

Upon Award of Contract

10 Insurance Tracking Report

5.8.2 Monthly Submitted to the

COR via email.

10th day of each month upon contract award.

11 Training 5.9 Bi-annually, up to quarterly by request.

In-Person or via Microsoft Teams (if approved by

COR)

On Request, Contractor and Government will collaborate on training dates.

Attachment C: Performance Requirements Summary

Meeting the performance standards and thresholds are critical to mission success. Negative performance will be documented as non-compliant and will be reflected in the Contractor Performance Assessment Reporting System (CPARS).

Performance Objectives

PWS

Parag

Performance Standard Acceptable Quality Level

Method of Surveillance

Lender-Placed Insurance

5.1 Provides lender-placed

policy until properly released.

Insurance will be provided with 95% success.

Monthly COR inspection and receipt of customer/SO complaints.

Coverage 5.1.1 Provide insurance coverage for hazards, flood, mobile homes, and windstorms.

100% of required lender-placed policies.

Periodic inspections, monthly COR inspection, receipt of customer/SO complaints.

Coverage Lapse Resolution

5.1.2 Obtain coverage for

Government loans with a lapse in coverage.

100% of lapsed loans receive coverage.

Periodic inspections, monthly COR inspection, receipt of customer/SO complaints.

Coverage Notification

5.1.3 Notify borrowers of

lapse of coverage and RD's intent to levy lender-placed insurance coverage via letter.

Borrowers notified on time with up to 5% late notification.

Monthly COR inspection and receipt of customer/SO complaints.

Premiums 5.1.4 Submit premiums and premium refunds.

95% of premium submissions/refunds conducted on time.

Monthly COR verification and additional inspections as needed.

Terminations and Renewals

5.1.5 Issue notifications of

terminations/renewals.

95% of terminations/renewals notifications conducted on time.

Monthly COR verification and additional inspections as needed.

Performance Objectives

PWS

Parag

Performance Standard Acceptable Quality Level

Method of Surveillance

Compliance 5.1.6 Interpret, understand, and communicate all legal and regulary requirements.

100% adherence to federal/state legislation.

Quarterly verification and additional reviews as needed.

Inspections 5.2 Conduct property inspections to determine the status of repairs fom damages.

95% of all requested inspections conducted on time with no errors.

Monthly COR verification and additional inspections as needed.

Photographic Evidence

5.2.1 Provide photographic

evidence as documentation for damages/repair.

Provide RD 100% of generated photographs in digital format.

Quarterly verification and additional reviews as needed.

Written Reports

5.2.2 Provide written report

explaining the inspection and progress of repairs.

95% of reports submitted on time and error-free.

Monthly COR verification and additional inspections as needed.

Check Processing

5.3 Disburse payment to

insurance vendors.

95% of checks disbursed on time and error-free.

Monthly COR verification and additional inspections as needed.

Check Reports 5.3.1 Provide report of check useage and voided/destroyed check.

100% reports submitted weekly and on time.

Quarterly COR verification and receipt of complaints from SO personnel.

Digital Images 5.3.2 Provide digital images of returned/rejected checks.

95% of images submitted on time.

Quarterly COR verification and receipt of complaints from SO personnel.

Mail Services 5.4 Provide mail services for renewals, perils, revised flood zone determinations, etc.

95% of all correspondence submitted on time without error.

Quarterly COR verification and additional inspections as needed.

Loss Processing

5.5 Submit claim draft and

adjuster's worksheet to RD.

100% of reports stipulated in 5.8.2 and sub-parts submitted on time.

Deliquencies verified within 30 days. Loan

Quaterly COR verification for reports. Monthly COR verification of escrow payments and additional

PWS

Parag

Performance Standard Acceptable Quality Level

Method of Surveillance conversion/payment within thirty days.

inspections as needed.

Loss Drafts 5.5.1 Issue loss drafts, monitored and quick endorsed.

95% of loss drafts issued on time, error-free.

Monthly COR verification and additional inspections as needed.

Customer/SO complaints.

Claims Negotiation

5.5.2 Conduct claims

negotation between borrower and Contractor.

95% of all negotations handled without Government intervention.

Exceed threshold of negotations without Government intervention. Bi-monthly COR report and additional inspections as needed.

Lender Placed Loss Claims Tracking Report

5.5.3 Provide reports for

claims in-process, paid, and borrowers with multiple claims.

100% of reports in

5.5.3 and subparts submitted on-time and error-free.

Monthly COR verification.

Flood Determinations

5.6 Provide Flood

Determination Services

95% of determinations developed on-time and error-free.

Monthly COR verification and additional inspections as needed.

Security/ID Database

5.6.1 Provide security access

and maintain ID data base for flood determinations.

100% maintained without error.

Random sampling, quarterly COR verification and additional inspections as needed.

Loan Monitoring

5.6.2 Provide life-of-loan

monitoring on special flood hazard area designations.

100% maintained with no lapse in monitoring.

Quarterly COR verification and additional inspections as needed.

Reports 5.6.3 Provide monthly report on determinations in process.

100% of reports submitted on-time and error-free.

Monthly COR verification.

Information Management System (IMS)

5.7 Provde an IMS

compatible with RD systems.

100% accessibility. Monthly COR verification and additional inspections as needed.

PWS

Parag

Performance Standard Acceptable Quality Level

Method of Surveillance

Insurance Tracking Services

5.8 Provide loan tracking

services.

95% of all loans requiring tracking are properly tracked without error.

Monthly COR verification and additional inspections as needed.

Information Review

5.8.1 Provide capability to

identify and review borrower information.

100% accessibility. Monthly COR verification and additional inspections as needed.

Reports 5.8.2 Provide capability to generate and export tracking/trend reports.

100% accessibility. Monthly COR verification and additional inspections as needed.

Training 5.9 Provide comprehensive on-site training to RD personnel.

100% of training executed on request.

COR evaluates training and reviews input from personnel in training session.