Insurance on property securing loan or credit
- • certain practices by depository institutions prohibited
(1) A depository institution may not:
(a) Solicit the sale of insurance for the protection of real or personal property after a person indicates interest in securing a loan or credit extension, until the depository institution has agreed to make the loan or credit extension;
(b) Refuse to accept a written binder issued by an insurance producer as proof that temporary insurance exists covering the real or personal property that is the subject matter of, or security for, a loan or extension of credit, and that a policy of insurance will be issued covering that property. A written binder issued by an insurance producer or insurer covering real or personal property that is the subject matter of, or security for, a loan or extension of credit shall be effective until a policy of insurance is issued in lieu thereof, including within its terms the identical insurance bound under the binder and the premium therefor, or until notice of the cancellation of the binder is received by the borrower and the depository institution extending credit or offering the loan. When a depository institution closes on a binder under ORS 742.043 (Binders), the insurance producer or insurer issuing the binder shall be bound to provide a policy of insurance, equivalent in coverage to the coverage set forth in the binder, within 60 days from the date of the binder. The provisions of this paragraph do not apply when prohibited by federal or state statute or regulations; or
(c) Use or disclose to any other insurance producer, other than the original insurance producer, the information relating to a policy of insurance furnished by a borrower unless the original insurance producer fails to deliver a policy of insurance within 60 days prior to expiration to the depository institution without first procuring the written consent of the borrower.
(2) As used in this section, “depository institution” means a financial institution as that term is defined in ORS 706.008 (Additional definitions for Bank Act). [1977 c.742 §4; 1987 c.916 §10; 2003 c.363 §12; 2003 c.364 §144a]
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