Section 40.806 - Prohibition Against Duplicate Insurance(a) An industrial loan company shall neither sell nor require the purchase of insurance on any property securing a loan if existing insurance is reasonably sufficient to protect the industrial loan company and the borrower.(b) An industrial loan company shall take reasonable precautions to prevent the sale of insurance which would result in duplicate coverage.(c) Each loan file shall contain a document evidencing the steps taken to prevent duplicate insurance coverage. Said document shall include: (2) The name of the borrower;(3) The security for the loan;(4) A statement whether or not insurance, including homeowner insurance, is in effect, and if so, (A) The amount of coverage;(B) The effective date of coverage;(C) The term of coverage; and(5) A notice that the borrower may purchase insurance from any licensed insurance agent and is not required to purchase insurance from the lender; and(6) The signature of the officer or employee closing the loan and the signature of the borrower.(d) Before an industrial loan company may require or sell fire insurance on real property, it shall first obtain documentary proof from all lenders holding prior encumbrances that reasonably sufficient insurance is not in effect. The documents so obtained shall be maintained in the borrower's loan file with the document required by subsection (c).Cal. Code Regs. Tit. 10, § 40.806
1. Change without regulatory effect renumbering former section 1190.2 to new section 40.806 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.
1. Change without regulatory effect renumbering former section 1190.2 to new section 40.806 filed 8-19-97 pursuant to section 100, title 1, California Code of Regulations (Register 97, No. 34).