California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 8 - Insurance › Section 40.809 - 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 expires prior to
				  the maturity date of a loan, an industrial loan company may require additional
				  insurance in a reasonable amount and for a reasonable period, considering the
				  circumstances of the loan.
(b) The
				  premium on the additional 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
				  40.800.
(c) Additional required insurance shall be
				  effective immediately upon the premium being charged to or collected from the
				  borrower except as provided in Section
				  40.800.
(d) If an industrial loan company elects 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 the industrial loan company to notify the
				  borrower, at least fifteen days prior to the expiration date of the existing
				  insurance, that it intends to write additional insurance as authorized. If an
				  industrial loan company does not notify the borrower, and the borrower procured
				  additional insurance prior to, and to be effective upon, the expiration of the
				  existing insurance, any insurance procured by the industrial loan company
				  pursuant to this authorization shall, on notice from the borrower, be canceled
				  at no cost to the borrower.
(e) If
				  an industrial loan company elects 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 the industrial loan company to
				  notify the borrower, within five days after receipt by the industrial loan
				  company of notice of cancellation, that it intends to write the additional
				  insurance as authorized. If an industrial loan company does not notify the
				  borrower, and the borrower procured additional insurance prior to, and to be
				  effective upon, the cancellation of the existing insurance, any insurance
				  procured pursuant to the authorization shall, on notice from the borrower, be
				  canceled at no cost to the borrower.
(f) Any notice by the industrial loan 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 any additional precomputed
				  charges.
1. Change
					 without regulatory effect renumbering and amending former section
					 1191 to new section
					 40.809 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18294,
						Financial Code.