We have a commercial loan on a property that requires hazard insurance. It was discovered that the borrower canceled the hazard insurance a year ago, and there has been no communication or documentation from the insurance company as far as we know. This loan has not had hazard insurance nor has it been force-placed for over a year. Our loan department has recently initiated the 45-day letter process. My the question is, since the loan has not had any insurance for over a year and there has been no communication from the insurance company or the borrower, would we be in violation if we put the loan in force before the 45-day mark? Please advise.

If you are not talking about flood insurance, any other hazard insurance requirements are based on the bank's internal risk assessment and policies and procedures governing the insurance of collateral.

Also, you may want to read the note and security agreement. It may be considered a default and your conversation with the borrower could have a bit more force to it.