California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 6 - California Financing Law › Article 6 - Insurance › Section 1491 - Requirements and Limitations on Additional Required Insurance when Existing Insurance Expires Before Maturity of Loan

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) When required insurance exists in an
				  amount sufficient to protect a finance company, but expired prior to the
				  maturity date of a loan, such finance company may require additional insurance
				  in a reasonable amount and for a reasonable period, considering the
				  circumstances of the loan.
(b) The
				  premium on such additional renewed insurance shall not be charged to or
				  collected from the borrower prior to the expiration of the existing required
				  insurance except as provided in Section
				  1486 of these rules.
(c) Such additional required insurance shall
				  be made effective immediately upon said premium being charged to or collected
				  from the borrower except as provided in Section
				  1486 of these rules.
(d) If a finance company shall elect to place
				  required insurance or act under any authorization taken from a borrower to
				  write or procure additional insurance upon the expiration of existing
				  insurance, it shall be the duty of such finance company to notify the borrower,
				  at least fifteen days prior to the expiration date of the existing insurance,
				  that it intends to write such additional insurance as authorized. If a finance
				  company does not so notify the borrower, and such borrower shall have procured
				  additional insurance prior to, and to be effective upon the expiration of the
				  existing insurance, any insurance procured by the finance company pursuant to
				  such authorization shall, on notice from the borrower, be canceled at no cost
				  to the borrower.
(e) If a finance
				  company shall elect to act under any authorization taken from a borrower to
				  write or procure additional insurance in the event of cancellation of existing
				  insurance, it shall be the duty of such finance company to notify the borrower,
				  within five days after receipt by the finance company of notice of
				  cancellation, that it intends to write such additional insurance as authorized.
				  If a finance company does not so notify the borrower, and such borrower shall
				  have procured additional insurance prior to, and to be effective upon the
				  cancellation of the existing insurance, any insurance procured pursuant to such
				  authorization shall, on notice from the borrower, be canceled at no cost to the
				  borrower.
(f) Any notice by the
				  finance company that it intends to place required insurance or sell additional
				  insurance shall state the type of insurance to be sold, the effective date, the
				  amount of the premium, any change in the terms of the loan and the amount of
				  any additional precomputed charges.
1. New NOTE
					 filed 12-29-83; effective thirtieth day thereafter (Register 83, No.
					 53).
2. Change without regulatory effect amending subsections (d),
					 (e) and NOTE filed 6-14-95 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 95, No. 24).
Note: Authority cited: Section
						22150,
						Financial Code. Reference: Sections
						22150,
						22311,
						22312 and
						22313,
						Financial Code.