First Union Corp. and Willis Corroon Corp., a risk management insurance and reinsurance organization based in Charlotte, N.C., will introduce an environmental insurance product to protect lenders.
The policy will be underwritten by American International Group. It would compensate a lender if an environmental problem led to the default of a commercial loan and collateral difficulties.
The product will be introduced at First Union locations in the Carolinas and offered early next year in all the company's markets.
No other large institution has offered such a policy, the companies said. It will let a bank transfer environmental risk, not just manage it, they said, and can be underwritten in two days.
First Union said it believes the product will become as widely accepted as title insurance.