Section 40.802 - Insurance Which May be Required and Sold(a) The following types of insurance may be required and sold by industrial loan companies: (1) Material damage insurance on motor vehicles (including motorcycles, mobile homes and other vehicles licensed by the Department of Motor Vehicles), boats and aircraft may be required and sold subject to the following requirements: (A) The amount of the annual premium shall not exceed one-third of the principal amount of the loan exclusive of any insurance premium or one-third of the reasonable value of the collateral insured;(B) The insurance shall contain a deductible clause of $50 or more;(C) The principal amount of the loan or loan balance, exclusive of any insurance premiums, shall be $500 or more; and(D) The reasonable value of the collateral insured shall be $500 or more.(2) Fire insurance on household goods, business equipment, and other types of tangible personal property may be required and sold subject to the following requirements: (A) The principal amount of the loan or loan balance, exclusive of any insurance premiums, shall be $500 or more; and(B) The reasonable value of the collateral insured shall be $500 or more.(3) Fire insurance and other types of coverage which protect against damage to real property securing a loan.(4) Title insurance for loans primarily secured by real property as provided in Section 18006 of the Financial Code. The cost of title insurance shall not be charged or collected in connection with loans which are not primarily secured by real property.(5) Any type of insurance coverage required by the Federal Deposit Insurance Corporation.(b) This section shall not prohibit an industrial loan company from requiring that collateral to be used as security for a loan be reasonably insured against the indicated losses and that the industrial loan company be named as loss payee to the extent of its security interest.(c) The Commissioner may disapprove the sale of any type or policy of insurance which in the Commissioner's opinion does note provide adequate coverage or is not good business practice. Any type of insurance or policy of insurance so disapproved may not be offered or sold by any industrial loan company.Cal. Code Regs. Tit. 10, § 40.802
1. Change without regulatory effect renumbering former section 1188 to new section 40.802 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: Sections 18294 and 18358, Financial Code.
1. Change without regulatory effect renumbering former section 1188 to new section 40.802 filed 8-19-97 pursuant to section 100, title 1, California Code of Regulations (Register 97, No. 34).