Insurers are selective and look for exposure to better-quality borrowers and for a strong risk alignment with the bank. CRI of up to $150-200m per loan can be arranged on a syndicated basis and maturities can extend to 10(+) years with most capacity at 5 years. Premiums are usually set as a percentage of the loan margin and allowance can be made for elevated funding costs.
Fees are not normally shared. Banks are required to keep a minimum 10% of the loan uninsured to establish an alignment of interest. The insurance is silent to the borrower.
There is scope to insure both new loans and existing loans for portfolio management purposes.
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