2023 Rhode Island General Laws › Title 27 - Insurance › Chapter 27-6.1 - Lender-Placed Insurance › Section 27-6.1-3. - Definitions.

§ 27-6.1-3. Definitions.
As used in this chapter:
(1)
“Affiliate” means a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.
(2)
“Commissioner” shall have the meaning established in § 42-14-5.
(3)
“Individual lender-placed insurance” means coverage for individual real property evidenced by a certificate of coverage under a master lender-placed insurance policy or a lender-placed insurance policy for individual real property.
(4)
“Insurance producer” means a person or entity (or its affiliates) required to be licensed under the laws of this state to sell, solicit, or negotiate insurance.
(5)
“Insurer” means an insurance company, association, or exchange authorized to issue lender-placed insurance in this state (or its affiliates).
(6)
“Investor” means a person or entity (and its affiliates) holding a beneficial interest in loans secured by real property.
(7)
“Lapse” means the moment in time in which a mortgagor has failed to secure or maintain valid and/or sufficient insurance upon mortgaged real property as required by a mortgage agreement.
(8)
“Lender” means a person or entity (and its affiliates) making loans secured by an interest in real property.
(9)
“Lender-placed insurance” means insurance obtained by a lender or servicer when a mortgagor does not maintain valid and/or sufficient insurance upon mortgaged real property as required by the terms of the mortgage agreement. It may be purchased unilaterally by the lender or servicer, who is the named insured, subsequent to the date of the credit transaction, providing coverage against loss, expense, or damage to collateralized property as a result of fire, theft, collision, or other risks of loss that would either impair a lender, servicer, or investor’s interest or adversely affect the value of collateral covered by limited dual interest insurance. It is purchased according to the terms of the mortgage agreement as a result of the mortgagor’s failure to provide evidence of required insurance.
(10)
“Loss ratio” means the ratio of incurred losses to earned premium.
(11)
“Master lender-placed insurance policy” means a group policy issued to a lender or servicer providing coverage for all loans in the lender or servicer’s loan portfolio as needed.
(12)
“Mortgage agreement” means the written document that sets forth an obligation or a liability of any kind secured by a lien on real property and due from, owing, or incurred by a mortgagor to a lender on account of a mortgage loan, including the security agreement, deed of trust, and any other document of similar effect, and any other documents incorporated by reference.
(13)
“Mortgage loan” means a loan, advance, guarantee, or other extension of credit from a lender to a mortgagor.
(14)
“Mortgage transaction” means a transaction by the terms of which the repayment of money loaned or payment of real property sold is to be made at a future date or dates.
(15)
“Mortgagee” means the person who holds mortgaged real property as security for repayment of a mortgage agreement.
(16)
“Mortgagor” means the person who is obligated on a mortgage loan pursuant to a mortgage agreement.
(17)
“Person” means an individual or entity.
(18)
“Real estate owned property” means property owned or held by a lender or servicer following foreclosure under the related mortgage agreement or the acceptance of a deed in lieu of foreclosure.
(19)
“Replacement cost value (RCV)” is the estimated cost to replace covered property at the time of loss or damage without deduction for depreciation. RCV is not market value, but it is instead the cost to replace covered property to its pre-loss condition.
(20)
“Servicer” means a person or entity (and its affiliates) contractually obligated to service one or more mortgage loans for a lender or investor. The term “servicer” includes entities involved in subservicing arrangements.
History of Section.
P.L. 2022, ch. 404, § 7, effective June 30, 2022; P.L. 2022, ch. 405, § 7, effective June 30, 2022.