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PARRIS N. GLENDENING, Governor
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Ch. 532
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(3) (I) EXCEPT AS PROVIDED IN THIS SUBSECTION, A CREDIT
GRANTOR MAKING A COVERED LOAN MAY NOT FINANCE AS A PART OF THE COVERED
LOAN TRANSACTION SINGLE PREMIUM COVERAGE FOR:
1. CREDIT HEALTH INSURANCE;
2. CREDIT INVOLUNTARY UNEMPLOYMENT BENEFIT
INSURANCE; OR
3. CREDIT LIFE INSURANCE.
(II) NOTHING IN THIS SUBSECTION SHALL PROHIBIT THE
FINANCING OF ANY INSURANCE COVERAGE IN CONNECTION WITH A MOBILE HOME
OR ITS PREMISES, AS THOSE TERMS ARE DEFINED IN § 8A-1Q1 OF THE REAL
PROPERTY ARTICLE.
[(b)] (C) The provisions of this section do not alter or modify rights, privileges,
or restrictions heretofore existing between the credit grantor and a borrower other
than a consumer borrower.
[(c)] (D) Premiums for any insurance coverage permitted by this section are
not interest with respect to a loan.
[(d)] (E) The offer and placement of insurance under this section shall be
subject to the provisions of the Insurance Article.
[(e)] (F) (1) In this subsection, "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) (i) A credit grantor may not require a borrower, as a condition to
receiving or maintaining a loan secured by a first lien, 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.
(ii) In determining the replacement value of the improvements on
any property, the lender may:
1. Accept the value placed on the improvements by the
insurer; or
2. Use the value placed on the improvements that is
determined by the lender's appraisal of the real property.
(3) A violation of this subsection shall entitle the borrower to:
(i) Seek an injunction to prohibit the credit grantor who has
engaged or is engaging in the violation from continuing or engaging in the violation;
(ii) Reasonable attorney's fees; and
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(iii) Damages directly resulting from the violation.
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- 4015 -
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