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MARVIN MANDEL, Governor 2827
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(a) Subject to the provisions of this section, a
lender may collect from the borrower, at the option of
the borrower, the premiums paid [to insure] FOR:
[(1) Real or personal property securing a loan; or
(2) The life of any person obligated on a loan.]
(1) INSURANCE COVERING ANY REAL OR PERSONAL PROPERTY
PLEDGED AS SECURITY FOR THE LOAN;
(2) ACCIDENT AND HEALTH INSURANCE COVERING ANY ONE
BORROWER, IF THE INSURANCE DOES NOT PROVIDE FOR BENEFITS
EXCEEDING THE ACTUAL PERIOD OF DISABILITY; AND
(3) CREDIT LIFE INSURANCE:
(I) COVERING ANY ONE BORROWER FOR ANY LOAN UNDER
$700 IN VALUE OR AMOUNT; OR
(II) COVERING ANY ONE OR MORE BORROWERS FOR ANY LOAN
OF $700 OR MORE IN VALUE OR AMOUNT.
(B) (1) A LENDER MAY NOT REQUIRE THAT THE INSURANCE
BE PURCHASED THROUGH A PARTICULAR BROKER, AGENT, OR
INSURANCE COMPANY.
(2) THE LENDER MAY:
(I) ASSIST AN APPLICANT OR ACT WITH HIM IN
FORWARDING AN APPLICATION TO A BROKER OR AGENT; AND
(II) RECEIVE AND TRANSMIT PREMIUMS OR OTHER
IDENTIFIABLE CHARGES FOR THE INSURANCE.
(3) AT THE OPTION OF THE BORROWER, A LENDER MAY BE
COINSURED OR PROTECTED TO THE EXTENT OF HIS INTEREST BY A
MORTGAGEE CLAUSE.
(C) [(b)] (1) The amount of property insurance may
not exceed EITHER the reasonable value of the property
insured[, and the type of insurance coverage shall bear a
reasonable relation to the existing risk of loss.
(2) The amount of life insurance may not exceed] OR
the originally scheduled total of payments under the loan
contract. THE TERMS AND CONDITIONS OF THE PROPERTY
INSURANCE POLICY SHALL BE FILED WITH AND APPROVED BY THE
INSURANCE COMMISSIONER. PROPERTY INSURANCE MAY NOT BE
PROVIDED IF, TO THE LENDER'S KNOWLEDGE, THE BORROWER AT
THE TIME THE LOAN IS MADE HAS VALID AND COLLECTIBLE
INSURANCE COVERING THE PROPERTY TO BE INSURED.
(2) ACCIDENT AND HEALTH INSURANCE SHALL PROVIDE
FOR:
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(I) BENEFITS NOT EXCEEDING THE THEN SCHEDULED UNPAID
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