892 LAWS OF MARYLAND. [CH. 679

CHAPTER 679.

(House Bill 790)

AN ACT to add a new section to Article 58A of the Anno-
tated Code of Maryland (1939 Edition), title "Loans-
Petty", said new section to be known as Section 16A, to
follow immediately after Section 16 of said Article, relating
to the insurance of property offered as security for loans and
on the life of the borrower.

SECTION 1. Be it enacted by the General Assembly of Mary-
land,, That a new section be and it is hereby added to Article
58A of the Annotated Code of Maryland (1939 Edition), title
"Loans—Petty", said new section to be known as Section 16A,
to follow immediately after Section 16 of said Article, and to
read as follows:

16A. Licensees may require a borrower to insure tangible
personal property except household goods, when offered as
security for a loan under this Article, against any substantial
risk or loss, damage or destruction. The amount of such insur-
ance may not exceed a reasonable value of such property. The
term of the policy and the conditions thereof shall be reason-
able and appropriate considering the particular loan trans-
action. The licensee may be a co-insured or may be protected
by a mortgagee clause to the extent of his interest. Licensees
may require life insurance on the life of the borrower in an
amount not to exceed the amount of the contract. Such in-
surance must be written by companies qualified to do business
in this State at rates which do not exceed those fixed pur-
suant to law or by a current applicable manual of a recognized
insurance rating bureau. Licensees may assist an applicant
or act with the applicant in forwarding such applications to a
broker or agent and may receive and transmit premiums on
such insurance on behalf of the borrower. Neither the licensee,
nor any officer, or employee of a licensee may receive, either
directly or indirectly, any commission or similar compensa-
tion in connection with the writing or placing or servicing
of such insurance.

SEC. 2. And be it further enacted, That this Act shall take
effect June 1, 1943.

Approved May 7, 1943.