U.S. Department of Housing and Urban Development

PUBLIC AND INDIAN HOUSING

Special Attention of: Transmittal Guidebook No.: 7401.5

Secretary\'s Representatives;

State/Area Coordinators; Directors, Issued: May 8, 1996

Offices of Public Housing; Administrators,

Offices of Native American Programs; Public Housing

Agencies; Indian Housing Authorities;

Resident Management Corporations (RMCs)

1\. This Transmits Public and Indian Housing Property/Casualty Insurance

Requirements Guidebook 7401.5, dated May 1996.

2\. Explanation of Material

This Guidebook replaces Property/Casualty Insurance Requirements

Handbook 7401.5, dated 1193. Significant changes reflect the modified

terms and conditions of the revised Annual Contributions Contract

(ACC) (Forms
[HUD-53012A](http://www.hud.gov/utilities/intercept.cfm?/offices/adm/hudclips/forms/files/53012-a.pdf)
and HUD-53012B). Unless imposed by the ACC,

Federal Regulations or Statutes, previous \"requirements\" in the

Handbook have been changed to \"recommendations.\" The Guidebook also

updates various insurance terminology and coverages.

Kevin Emanuel Marchman, Deputy Assistant

Secretary for Distressed and Troubled Housing Recovery

PH: Distribution: W-3-1, R-3-1(PIH), R-6, R-7, R-9, 138-2, 138-7, RMC-2

Guidebook 7401.5

U.S. Department of Housing and Urban Development

Office of Public and Indian Housing

Departmental Staff,

Public Housing

Agencies and Indian

Housing Authorities

May 1996 Public and Indian

Housing

Property/Casualty

Insurance

Requirements

U.S. Department of Housing and Urban Development

PUBLIC AND INDIAN HOUSING

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Special Attention: Transmittal Handbook No.: 7401.5 CHG-1

Secretary\'s Representatives;

Directors, Offices of Public

Housing; Administrators, Offices of Issued: September 2, 1994

Native Americans; Directors, Field

Office Managers; Directors, Public

Housing Divisions; Public Housing

Agencies/Indian Housing Authorities;

Resident Management Corporations

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1\. This Transmits Amendments to Public and Indian Housing

Property/Casualty Insurance Requirements, Handbook 7401.5

dated 9/94.

2\. Explanation of Material Transmitted.

a\. Paragraph 6-1 has been clarified to state that there is

no requirement to purchase burglary and robbery

insurance, as long as the amount of the cash and checks

on hand at any one time does not exceed \$5,000.

b\. Paragraph 11-3b has been clarified that the certificate

of insurance must be signed by an authorized

representative of the insurance company.

c\. When the Handbook was issued, regulations regarding

HA-owned insurance companies and pools had not been

published, and therefore, Chapter 17 was \"reserved.\"

Regulations (Appendix 4) are now in effect. A new Page

17-1 contains a brief summary of the Regulations.

d\. Previously, commercial general liability and automobile

liability policies were required to have an endorsement

prohibiting the insurance company from defending any

tort claim on the ground of immunity of the HA from

suit or statutes granting limited liability. This

endorsement is no longer required, and pages 1-4, 3-5,

5-1, 13-24, 13-37 referencing this requirement, have

been amended accordingly.

e\. Property insurance policies are no longer required to

have an endorsement providing that first party claim

payments in excess of \$15,000 be made payable jointly

to both the HA and HUD. Therefore, reference to this

endorsement has been eliminated from page 18-4 of the

glossary.

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3\. Filing Instructions.

Handbook 7401.5 Handbook 7401.5 CHG-1

Remove: Insert:

Pages 1-3, 1-4, 3-5, 5-1, Page 1-3, dated 1/93

5-2, 6-1, 11-1, 11-2, Page 1-4, dated 9/94

13-23, 13-24, 13-37, Pages 5-1 and 5-2, dated 9/94

13-38, 17-1, 18-3, 18-4 Page 6-1, dated 9/94

18-9 and 18-10, dated 1/93 Pages 11-1 and 11-2, dated 9/94

Pages 13-23 and 13-24, dated 9/94

Page 13-37, dated 9/94

Page 13-38, dated 1/93

Page 17-1, dated 9/94

Page 18-3, dated 1/83

Page 18-4, dated 9/94

Page 18-9, dated 9/94

Page 18-10, dated 1/93

Appendix 4, dated 9/94

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Assistant Secretary for Public

and Indian Housing

9/94 2

W-3-1, W-2(H), R-6, R-7, R-9, 138-2, 138-7, RMC-2

W-3-1 Directives Management Officers\--Headquarters and Regions,

library, ACIR (Advisory Commission on Intergovermental

Relations)

W-2 HQ Office Directors, Special Assistants,

those reporting directly to Assistant Secretaries

R-6 Category A offices - Office Managers and Deputy Office Managers

R-7 Category B offices - Office Managers and Deputy Office Managers

R-9 Directors and Deputy Directors, Offices of Indian Programs

U.S. Department of Housing and Urban Development

PUBLIC AND INDIAN HOUSING

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Special Attention of: Regional

Administrators; Directors, Offices Transmittal Handbook No.: 7401.5

of Public Housing; Directors, Offices

of Indian Programs; Field Office Issued: January 7, 1993

Managers; Directors, Public Housing

Divisions; Public Housing Agencies/

Indian Housing Authorities; Resident

Management Corporations

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1\. This Transmits Public and Indian Housing Property/Casualty

Insurance Requirements, Handbook 7401.5 dated 1/93.

2\. Explanation of Material Transmitted.

a\. A complete revision of existing Guides and Handbooks

reflecting the requirements of the Annual Contributions

Contract/Mutual Help Annual Contributions Contract

(ACC/MHACC), 24 CFR 85.36 and current insurance

industry practice.

b\. Some significant changes other than narrative, consist

of:

\(1\) Paragraph 1-4. recommends standards for selecting

a financially sound and responsible insurance

company.

\(2\) Paragraph 1-7. clarifies the applicability of the

Davis-Bacon Wage Rates/Prevailing Wage Rates of

reconstruction.

\(3\) Paragraph 1-11. describes insurance requirements

for a Resident Management Corporation (RMC).

\(4\) Paragraph 2-2. contains the formula to compute

current insurable values as required in the

ACC/MHACC.

\(5\) Paragraph 2-9., 3-9., 5-3. and 7-6 remove HUD as a

party insured.

\(6\) Paragraph 3-7. provides guidance regarding

Environmental Liability.

\(7\) Paragraph 8-11. provides guidance regarding

Directors and Officers Liability.

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7401.5

\(8\) Chapter 9 makes Flood Insurance a required

coverage under the ACC/MHACC if the HA has

property in a flood plain and insurance is

available through the National Flood Insurance

Program.

\(9\) Chapter 11 outlines the Field Office insurance

functions. This chapter waives the ACC/MHACC

requirements that the HA submit certified

duplicate copies of insurance policies to the HUD

Field Office for review and approval. Instead,

it permits the submission of a certificate of

insurance. In addition, it waives the

requirements that the Field Office receive copies

of bid tabulations for review and approval. It

also emphasizes that insurance information must be

entered in the SMIRPH system.

\(10\) Chapter 13 contains a complete format that HAs may

use in the preparation of an Invitation For Bids.

\(11\) Chapter 16 contains information on fidelity bond

coverage for HAs which administer the Section 8

Certificate and Voucher programs.

\(12\) Chapter 17 is reserved for future guidance

regarding HA-owned insurance entities.

\(13\) Chapter 18 is a glossary of common insurance terms

and phrases.

3\. Cancellation.

Low-Income Housing Administration of Program Handbook

7401.1, Chapter 14, Insurance and Bonding, 2/65

Low-Income Housing Insurance Guide, HMG 7401.5, 2/72.

Public Housing Development Handbook 7417.1 REV-1, Section 3,

Paragraphs 3-31 and 3-32, 10/80.

1/93 Page 2

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4\. Appendices.

Appendix One is a reproduction of Section 305 of the ACC.

Appendix Two is a reproduction of Article IX of the MHACC.

Appendix Three is a sample IFB advertisement.

5\. Data Resources. The System for Management Information

Retrieval for Public Housing. (SMIRPH Section 11)

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Assistant Secretary

for Public and Indian Housing

Page 3 1/93

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Handbook 7401.5

U.S. Department of Housing and Urban Development

Washington, D.C. 20410

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Departmental Staff

and Program Participants

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January 1993 Public and Indian

Housing Property/

Casualty Insurance

Requirements

EQUAL HOUSING

OPPORTUNITY

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W-3-l, W-2(H), R-1, R-3-1(PIH), R-3-2, R-6, R-6-1,

R-6-2, R-7, R-7-1, R-7-2, R-9, R-9-1, 138-2, 138-7, RMC-2

HUD-23 (9-81)

W-2 HQ Office Directors, Special Assistants, those

reporting directly to Assistant Secretaries

R-1 Regional Administrators, Deputy Regional Administrators

R-3-1 Bulk shipment to Regional Offices for selective

distribution by program area

R-3-2 Directors, Administrative Services Divisions and

Administrative and Management Services Divisions, and

Administrative staffs

R-6 Category A offices - Office Managers and Deputy Office

Managers

R-6-1 Category A offices - bulk

R-6-2 Category A offices - Division Directors

R-7 Category B offices - Office Managers and Deputy Office

Managers

R-7-1 Category B offices - bulk

R-7-2 Category B offices - Division Directors

R-9 Directors and Deputy Directors, Offices of Indian Programs

R-9-1 Offices of Indian Programs - bulk