California Insurance Code

§ 771

INS § 771 Effective Jan 1, 2023Div. 1 · Part 2 · Ch. 1 · Art. 5.5

Statute text

Sections 770 and 770.1 shall not prevent:

(a)The exercise by any person engaged in that business of that person’s right to approve or disapprove, for reasonable cause, as determined by appropriate regulatory authority, of the insurer selected to underwrite the insurance, nor of that person’s right to furnish 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 a 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 the 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 Commissioner of Financial Protection and Innovation, 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 the 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, the recommendation clearly setting forth the name and the mailing address of the recommended insurer or insurance agent or broker shall be in writing.

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Legislative history

Amended by Stats. 2022, Ch. 452, Sec. 193. (SB 1498) Effective January 1, 2023.