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ROBERT L. EHRLICH, JR., Governor
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Ch. 680
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Article - Insurance
12-106.
[(a) This section does not apply to life insurance or health insurance.]
(A) THIS SECTION APPLIES ONLY TO A BINDER OR POLICY, OTHER THAN A
RENEWAL POLICY, OF PRIVATE PASSENGER MOTOR VEHICLE, HOMEOWNERS,
DWELLING, CREDIT LOSS, OR COMMERCIAL PROPERTY INSURANCE OR LIABILITY
INSURANCE.
(B) A BINDER OR POLICY IS SUBJECT TO A 45-DAY UNDERWRITING PERIOD
BEGINNING ON THE EFFECTIVE DATE OF COVERAGE.
(C) AN INSURER MAY CANCEL A BINDER OR POLICY DURING THE
UNDERWRITING PERIOD IF THE RISK DOES NOT MEET THE UNDERWRITING
STANDARDS OF THE INSURER
(D) IF APPLICABLE, AT THE TIME OF APPLICATION OR WHEN A BINDER OR
POLICY IS ISSUED, AN INSURER SHALL PROVIDE WRITTEN NOTICE OF ITS ABILITY TO
CANCEL A BINDER OR POLICY DURING THE UNDERWRITING PERIOD.
(E) A NOTICE OF CANCELLATION UNDER THIS SECTION SHALL:
(1) BE IN WRITING;
(2) HAVE AN EFFECTIVE DATE NOT LESS THAN 15 DAYS AFTER MAILING;
AND
(3) STATE CLEARLY AND SPECIFICALLY THE INSURER'S ACTUAL
REASON FOR THE CANCELLATION.
[(b)] (F) A binder or other contract for temporary insurance:
(1) may be made orally or in writing; and
(2) except as superseded by the clear and express terms of the binder, is
considered to include:
(i) all the usual terms of the policy as to which the binder was
given; and
(ii) the applicable endorsements designated in the binder.
[(c)] (G) A binder is no longer valid after the policy as to which it was given is
issued.
[(d)] (H) (1) If a binder is given to a consumer borrower to satisfy a lender's
requirement that the borrower obtain property insurance or credit loss insurance as a
condition of making a loan secured by a first mortgage or first deed of trust on an
interest in owner-occupied residential real property, the insurer or its insurance
producer shall include in or with the binder:
(i) the name and address of the insured consumer borrower;
- 2757 -
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