Chapter
102
2003 -- S 0840 SUBSTITUTE A
Enacted 07/03/03
A N A C T
RELATING
TO INSURANCE -- FIRE INSURANCE POLICIES AND RESERVES
Introduced
By: Senators Walaska, and Bates
Date
Introduced: February 26, 2003
It
is enacted by the General Assembly as follows:
SECTION
1. Section 27-5-3.2 of the General Laws in Chapter 27-5 entitled "Fire
Insurance
Policies and Reserves" is hereby amended to read as follows:
27-5-3.2.
Property insurance. [Effective until April 1, 2003.] – (a) No
person, bank, or
lending
institution doing business in this state, whether acting under state or federal
authority,
which
includes, but is not limited to: (1) a bank, savings bank, or trust company, as
defined in this
title,
its affiliates or subsidiaries, (2) a bank holding company, as defined in 12
U.S.C. section
1841,
its affiliates or subsidiaries, (3) mortgage companies, and (4) any other
individual,
corporation,
partnership, or association authorized to take deposits and/or to make loans of
money
under
the provisions of title 19, making a mortgage loan, shall, as a condition of
the mortgage or
as a
term of the mortgage deed, require that the mortgagor carry property insurance
on the
property
which is the subject of the mortgage in excess of the replacement cost of any
buildings
or
appurtenances subject to the mortgage; provided, that if a mortgage is sold,
transferred,
conveyed,
or assigned, it shall be the responsibility of the holder of the mortgage to
notify the
insurance
producer issuing the property insurance policy in writing of that sale,
transfer,
conveyance,
or assignment. This notice shall be made in writing and shall be sent to the
insurance
producer
within thirty (30) days of the sale, transfer, conveyance, or assignment by
registered
mail.
In the event that the holder of a mortgage shall fail to notify the insurance
producer who
issued
the property insurance policy that is in force, in writing, of that sale,
transfer, conveyance,
or
assignment within thirty (30) days, the holder shall indemnify and hold the
insurance producer
harmless.
(b)
Nothwithstanding any provision in this title to the contrary, no such holder of
a
mortgage
shall be entitled to payment of a claim under a property insurance policy for a
loss to a
covered
building which equals less than three thousand five hundred dollars ($3,500),
and for
which
such holder of a mortgage is otherwise entitled to payment, unless no liability
exists as to
the
mortgagor.
27-5-3.2.
Property insurance. [Effective April 1, 2003.] – (a) No lending
institution, as
defined
in section 19-9-1, doing business in this state, its affiliates or
subsidiaries, or a bank
holding
company, as defined in 12 U.S.C. section 1841, its affiliates or subsidiaries,
shall, as a
condition
of the mortgage or as a term of the mortgage deed, require that the mortgagor
carry
property
insurance on the property which is the subject of the mortgage in excess of the
replacement
cost of any buildings or appurtenances subject to the mortgage; provided, when
in
the
course of selling, transferring, conveying or assigning a mortgage, the
servicing rights of the
mortgage
are similarly transferred, conveyed or assigned, then and in that event it
shall be the
responsibility
of the holder of the mortgage to notify the insurance producer issuing the
property
insurance
policy and the insurer in writing of that sale, transfer, conveyance, or
assignment. This
notice
shall be made in writing and shall be sent to the insurance producer and the
insurer within
thirty
(30) days of the sale, transfer, conveyance, or assignment by mail. In the
event that the
holder
of a mortgage shall fail to notify the insurance producer and the insurer who
issued the
property
insurance policy that is in force, in writing, of that sale, transfer,
conveyance, or
assignment
within thirty (30) days, the holder shall indemnify and hold the insurance
producer
harmless.
(b)
Notwithstanding any provision in this title to the contrary, no such holder of
a
mortgage
shall be entitled to payment of a claim under a property insurance policy for a
loss to a
covered
building which equals less than three thousand five hundred dollars ($3,500),
and for
which
such holder of a mortgage is otherwise entitled to payment, unless no liability
exists as to
the
mortgagor.
SECTION
2. This act shall take effect upon passage.
=======
LC01610/SUB
A
=======