Pursuant to the provisions of Md. Code Ann., Com. Law §12-124(a)(5) and Md. Code Ann., Ins. §27-214(a), the multi-state Anti-Coercion Insurance Disclosure will be configured to print in all Initial Disclosure packages for all types of loans secured by property located in Maryland.
These two laws, although not explicitly requiring a disclosure, do prohibit a person from requiring the borrower to “buy insurance through a particular insurance producer or insurer as a condition, agreement, or understanding with respect to selling or providing a loan, credit . . . to the other person.” (Ibid. [a])
The purpose of providing Cx2778 is to let the borrowers know that they are free to choose their insurance agent and to provide proof that they knew of this fact and have no reason to assume that they are being coerced into an insurance transaction with an agent of the lender’s choice.
The document will begin printing in Initial Disclosure packages on October 30, 2012. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
October 22, 2012