WILLIAM DONALD SCHAEFER, Governor

Ch. 693

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article - Commercial Law

12-123.

(A) (1) IN THIS SECTION, "PROPERTY INSURANCE COVERAGE"
MEANS PROPERTY INSURANCE AGAINST LOSSES CAUSED BY PERILS THAT
COMMONLY ARE COVERED IN INSURANCE POLICIES DESCRIBED WITH TERMS
SIMILAR TO "STANDARD FIRE" OR "STANDARD FIRE WITH EXTENDED
COVERAGE".

(2)  A LENDER MAY NOT REQUIRE A BORROWER, UNDER AS A

CONDITION TO RECEIVING OR MAINTAINING A LOAN SECURED BY A FIRST
MORTGAGE OR FIRST DEED OF TRUST, TO PROVIDE OR PURCHASE PROPERTY
INSURANCE COVERAGE AGAINST RISKS TO ANY IMPROVEMENTS ON ANY REAL
PROPERTY IN AN AMOUNT EXCEEDING THE REPLACEMENT VALUE OF THE
IMPROVEMENTS ON THE REAL PROPERTY.

(2) THE REPLACEMENT VALUE OF THE IMPROVEMENTS ON THE
REAL PROPERTY SUBJECT TO THIS SECTION SHALL BE DETERMINED BY THE

INSURER SELECTED BY THE BORROWER TO PROVIDE THE PROPERTY

INSURANCE COVERAGE.

(3) IN DETERMINING THE REPLACEMENT VALUE OF THE
IMPROVEMENTS ON ANY REAL PROPERTY, THE LENDER MAY:

(I)  ACCEPT THE VALUE PLACED ON THE IMPROVEMENTS
BY THE INSURER; OR

(II)  USE THE VALUE PLACED ON THE IMPROVEMENTS
THAT IS DETERMINED BY THE LENDER'S APPRAISAL OF THE REAL
PROPERTY.

(3) (4) A LENDER MAY NOT REQUIRE THAT THE INSURANCE
BE PURCHASED THROUGH A PARTICULAR BROKER, AGENT, OR INSURANCE
COMPANY.

(B) (1) A VIOLATION OF THIS SECTION SHALL ENTITLE THE
BORROWER TO:

(I)  SEEK AN INJUNCTION TO PROHIBIT THE LENDER
WHO HAS ENGAGED OR IS ENGAGING IN THE VIOLATION FROM CONTINUING
OR ENGAGING IN THE VIOLATION;

(II)  REASONABLE ATTORNEY'S FEES; AND

(III)  DAMAGES DIRECTLY RESULTING FROM THE
VIOLATION.

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