CALIFORNIA CODES
CIVIL CODE
DIVISION 3. OBLIGATIONS
PART 4. OBLIGATIONS ARISING FROM PARTICULAR TRANSACTIONS
TITLE 14. LIEN
CHAPTER 2. MORTGAGE
Civil Code § 14:2924.7 Acceleration clause for nonpayment of taxes, rents, assessments, insurance premiums, advances; provision for payment of hazard insurance proceeds to beneficiary, trustee, mortgagee or agent; enforcement of clauses despite impairment of security interest
(a) The provisions of any deed of trust or mortgage on real property which authorize any beneficiary, trustee, mortgagee, or his or her agent or successor in interest, to accelerate the maturity date of the principal and interest on any loan secured thereby or to exercise any power of sale or other remedy contained therein upon the failure of the trustor or mortgagor to pay, at the times provided for under the terms of the deed of trust or mortgage, any taxes, rents, assessments, or insurance premiums with respect to the property or the loan, or any advances made by the beneficiary, mortgagee, or his or her agent or successor in interest shall be enforceable whether or not impairment of the security interest in the property has resulted from the failure of the trustor or mortgagor to pay the taxes, rents, assessments, insurance premiums, or advances.
(b) The provisions of any deed of trust or mortgage on real property which authorize any beneficiary, trustee, mortgagee, or his or her agent or successor in interest, to receive and control the disbursement of the proceeds of any policy of fire, flood, or other hazard insurance respecting the property shall be enforceable whether or not impairment of the security interest in the property has resulted from the event that caused the proceeds of the insurance policy to become payable.
CALIFORNIA CODES
INSURANCE CODE
DIVISION 1. GENERAL RULES GOVERNING INSURANCE
PART 2. THE BUSINESS OF INSURANCE
CHAPTER 1. GENERAL REGULATIONS
ARTICLE 5.5. INSURANCE IN CONNECTION WITH SALES AND LOANS
Insurance Code § 771 Permissible actions
Sections 770 and 770.1 shall not prevent:
(a) The exercise by any person engaged in such business of his right to approve or disapprove, for reasonable cause, as determined by appropriate regulatory authority, of the insurer selected to underwrite the insurance, nor of his right to furnish such insurance or to renew any insurance required by the contract of sale or trust deed or other loan agreement if the borrower or purchaser shall have failed to furnish the insurance or renewal thereof within such reasonable time or form as may be specified in the sale or loan agreement. The lender shall not refuse to accept insurance provided by an acceptable insurer on the ground that such insurance provides more coverage than is required in the sale or loan agreement, unless the additional coverage consists of automobile, life or disability insurance.
The Savings and Loan Commissioner, the Superintendent of Banks, and the Corporations Commissioner, in conjunction with the Insurance Commissioner, shall issue appropriate regulations defining "reasonable cause."
(b) Any lender from recommending to any borrower or prospective borrower the placing of insurance with a specified insurer or through a specified insurance agent or broker as long as such recommendation, with respect to a sale of real property or a loan upon the security of real property, clearly sets forth both the name and the mailing address of the recommended insurer or insurance agent or broker and does not violate the provisions of Section 770 or of any other section of this code. On and after July 1, 1972, such recommendation clearly setting forth the name and the mailing address of the recommended insurer or insurance agent or broker, shall be in writing.
(c) The free choice of insurance agent or broker by any borrower or purchaser at any time, and he may revoke any designation of insurance agent or broker at any time irrespective of the provisions of any loan or purchase agreement or trust deed.
(d) The exercise of any person engaged in such business of his right to furnish such insurance or to renew such insurance, and to charge the account of the borrower or purchaser with the costs thereof, if the borrower or purchaser fails to deliver to the lender such insurance at least 30 days prior to the expiration of the policy. If an insurance policy renewing or replacing, at expiration time, the policy then in force is received by the lender less than 15 days prior to the expiration of the policy held by the lender, or if an insurance policy procured by the borrower or purchaser is subsequently substituted for that then in force, the lender may impose a reasonable service charge as determined by the Insurance Commissioner for the transaction, the payment of which charge by the agent or broker is not a violation of any other provision of this code. No service charges shall be imposed for normal insurance changes made during the term of the policy.
(e) The commissioner is authorized to adopt a uniform statewide schedule of permissive maximum charges for the substitution of policies authorized in subdivision (d).
CALIFORNIA CODE OF REGULATIONS
Title 10. Investment
Chapter 3. Commissioner of Corporations
Subchapter 6. California Finance Lenders Law (Finance Company Rules)
Article 6. Insurance
Reg. § 10:1491 Requirements and Limitations on Additional Required Insurance When Existing Insurance Expires Before Maturity of Loan
(d) If a finance company shall elect 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 such finance company to notify the borrower, at least fifteen days prior to the expiration date of the existing insurance, that it intends to write such additional insurance as authorized. If a finance company does not so notify the borrower, and such borrower shall have procured additional insurance prior to, and to be effective upon the expiration of the existing insurance, any insurance procured by the finance company pursuant to such authorization shall, on notice from the borrower, be canceled at no cost to the borrower.
(e) If a finance company shall elect 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 such finance company to notify the borrower, within five days after receipt by the finance company of notice of cancellation, that it intends to write such additional insurance as authorized. If a finance company does not so notify the borrower, and such borrower shall have procured additional insurance prior to, and to be effective upon the cancellation of the existing insurance, any insurance procured pursuant to such authorization shall, on notice from the borrower, be canceled at no cost to the borrower.
(f) Any notice by the finance 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 the amount of any additional precomputed charges.
Click here to return to the summary page.