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931
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HARRY HUGHES, Governor
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(1975 Volume and 1982 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:
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Article - Commercial Law
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12-410.
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(a) Subject to the provisions of this section, a lender may
require a borrower to insure and may collect from him the
premiums paid for insurance on:
(1) Any real property securing the loan;
(2) The life of any person obligated on the loan; and
(3) The title of any real property securing the loan.
(B) SUBJECT TO THE PROVISIONS OF SUBSECTIONS (C), (D), AND
(E) OF THIS SECTION, A LENDER MAY COLLECT FROM A BORROWER, AT THE
OPTION OF THE BORROWER, THE PREMIUMS PAID FOR INVOLUNTARY
UNEMPLOYMENT BENEFIT INSURANCE COVERING THE BORROWER.
(1) "INVOLUNTARY UNEMPLOYMENT BENEFIT INSURANCE"
INCLUDES MEANS ANY INSURANCE DESIGNATED DESIGNED TO PAY A LENDER
THE MONTHLY PAYMENT OBLIGATION OF A BORROWER WHO HAS SUFFERED AN
INVOLUNTARY LOSS OF EMPLOYMENT.
(2) THE AVAILABILITY OF INVOLUNTARY UNEMPLOYMENT
BENEFIT INSURANCE TO A BORROWER MAY NOT BE MADE CONTINGENT ON THE
PURCHASE OF ANY OTHER TYPE OF INSURANCE PERMITTED UNDER THIS
SECTION.
[(b)] (C) (1) The amount of property insurance may not
exceed the reasonable value of the real 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 the
total original amount payable under the loan contract.
(3) THE INVOLUNTARY UNEMPLOYMENT BENEFIT INSURANCE
MAY NOT PROVIDE FOR PERIODIC BENEFITS THAT:
(I) COVERING A PERIOD BEYOND THE THE PERIODIC
BENEFITS SHALL CONTINUE FOR A PERIOD EXCEEDING THE ACTUAL PERIOD
OF THE BORROWER'S INVOLUNTARY UNEMPLOYMENT; OR
(II) OF AN THE AGGREGATE AMOUNT THAT IS IN
EXCESS OF THE TOTAL UNPAID SCHEDULED PAYMENTS OF PERIODIC
BENEFITS PAYABLE IN THE EVENT OF A BORROWER'S INVOLUNTARY LOSS OF
EMPLOYMENT SHALL EXCEED THE SCHEDULED UNPAID TOTAL OF PAYMENTS
REMAINING ON THE LOAN AS OF ON THE DATE OF THE BORROWER'S
INVOLUNTARY LOSS OF EMPLOYMENT.
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