Most states prohibit persons from requiring borrowers to obtain insurance through particular insurance agents. In order to help establish evidence that a client has not imposed such a requirement, we provide several different multi-state “anti-coercion” documents (including Cx2778) in which the borrower is apprised of this prohibition, thus providing him with the knowledge that he can shop for services from an insurance agent of his choice.
Cx2778 is provided in Initial Disclosure packages for loans secured by property in Hawaii, due to the provisions of Haw. Rev. Stat. Ann. § 431:13-104(c). In order to make the document more closely match the language of such provisions, we will be making the following changes to it:
- Printing the last sentence in a separate paragraph and replacing the last clause (“based on the financial ratings and strength of the insurer”) with the following:
“A rejection shall be deemed reasonable if it is based on reasonable standards, uniformly applied, relating to the extent of coverage required and the financial soundness and the services of an insurer. Such standards shall not discriminate against any particular type of insurer, nor shall such standards call for rejection of an insurance contract because the contract contains coverage in addition to that required in the loan or credit transaction.”
- Changing references to “the lender” to “any person,” since the prohibition is not limited to lenders and applies equally to brokers (and any other person).
- Specifying that the word “you” refers to the listed Borrower(s).
- Updating the citation to more closely match Blue Book standards.
These changes will take effect on July 17, 2014. If you have any questions or concerns about these changes, please contact Client Support at at 1.800.497.3584.
July 10, 2014