HARRY HUGHES, Governor

2977

(A)  (1) PRIOR TO THE SALE OF ANY TIME-SHARE, AND WHILE
THERE EXIST ANY TIME-SHARES, THE MANAGING ENTITY SHALL MAINTAIN
FOR THE BENEFIT OF THE DEVELOPER, ASSOCIATION, AND OWNERS
PROPERTY INSURANCE ON THE TIME-SHARE PROJECT AND ANY PERSONAL
PROPERTY AVAILABLE FOR USE BY TIME-SHARE OWNERS, OTHER THAN
PERSONAL PROPERTY SEPARATELY OWNED BY A TIME-SHARE OWNER,
INSURING AGAINST ALL RISKS OF DIRECT PHYSICAL LOSS COMMONLY
INSURED AGAINST, IN A TOTAL AMOUNT, AFTER APPLICATION OF ANY
DEDUCTIBLES, OF NOT LESS THAN 80 PERCENT OF THE ACTUAL CASH VALUE
OF THE INSURED PROPERTY, EXCLUSIVE OF LAND EXCAVATIONS,
FOUNDATIONS, AND OTHER ITEMS NORMALLY EXCLUDED FROM PROPERTY
POLICIES.

(2)  IF SUCH A POLICY IS REASONABLY OBTAINABLE, THE
POLICY SHALL PROVIDE THAT THE INSURER SHALL WAIVE ITS RIGHT TO
SUBROGATION UNDER THE POLICY AGAINST ANY TIME-SHARE OWNER OR
MEMBERS OF HIS HOUSEHOLD.

(3)  NO ACT OR OMISSION BY ANY TIME-SHARE OWNER,
UNLESS ACTING WITHIN THE SCOPE OF HIS AUTHORITY ON BEHALF OF AN
ASSOCIATION, SHALL VOID THE POLICY OR BE A CONDITION TO RECOVERY
BY ANY OTHER PERSON UNDER THE POLICY.

(4)  IF, AT THE TIME OF A LOSS UNDER THE POLICY, THERE
IS OTHER INSURANCE IN THE NAME OF A TIME-SHARE OWNER COVERING THE
SAME RISK COVERED BY THE POLICY, THE POLICY MAINTAINED PURSUANT
TO THIS SECTION IS PRIMARY INSURANCE MOT CONTRIBUTING WITH THE
OTHER INSURANCE, AND OTHER INSURANCE IN THE NAME OF A TIME-SHARE
OWNER APPLIES ONLY TO LOSS IN EXCESS OF THE PRIMARY COVERAGE.

(B)  IF THE INSURANCE REQUIRED BY THIS SECTION IS PROVIDED
BY A PERSON MANAGING A LARGER PROJECT OF WHICH THE TIME SHARE
PROJECT IS A PART, ANY LOSS COVERED BY THAT INSURANCE SHALL BE
ANY LOSS COVERED BY INSURANCE SHALL BE ADJUSTED WITH, AND THE
INSURANCE PROCEEDS FROM THAT LOSS SHALL BE PAYABLE TO, THE
INSURANCE TRUSTEE, WHO MAY BE A PARTY IN INTEREST, DESIGNATED IN
ACCORDANCE WITH THE TIME-SHARE INSTRUMENT. IF NONE HAS BEEN
DESIGNATED OR IF THE DESIGNATED TRUSTEE FAILS TO SERVE, THE
MANAGING ENTITY SHALL BE THE INSURANCE TRUSTEE. THE INSURANCE
TRUSTEE SHALL HOLD ANY INSURANCE PROCEEDS IN TRUST FOR TIME-SHARE
OWNERS AND LIENHOLDERS. THE PROCEEDS MUST BE DISBURSED FOR THE
REPAIR OR RESTORATION OF THE PROPERTY IN ACCORDANCE WITH THIS
SECTION, AND TIME-SHARE OWNERS AND LIENHOLDERS ARE NOT ENTITLED
TO RECEIVE PAYMENT OF ANY PORTION OF THE PROCEEDS UNLESS THERE
IS:

(1)  A SURPLUS OF PROCEEDS AFTER THE PROPERTY HAS BEEN
REPAIRED OR RESTORED, OR

(2)  THE PROJECT IS TERMINATED.

(C)  AN INSURER UNDER THIS SECTION SHALL ISSUE CERTIFICATES
OR MEMORANDA OF INSURANCE TO THE ASSOCIATION AND, UPON WRITTEN
REQUEST, TO ANY TIME-SHARE OWNER, MORTGAGEE, OR BENEFICIARY UNDER
A DEED OF TRUST. THE INSURANCE MAY NOT BE CANCELED UNTIL 30 DAYS