§ 23-66-605 — Insurance in connection with loan

(a) The following shall apply when insurance is required as a condition of obtaining a loan or extension of credit: (1) (A) No person, depository institution, or affiliate of a depository institution may require as a condition precedent to the lending of money or extension of credit, or any renewal thereof, that the person to whom the money or credit is extended or whose obligation a creditor is to acquire or finance, negotiate any policy or renewal thereof through a particular insurer or group of insurers or agent or broker or group of agents or brokers. (B) Further, no person, depository institution, or affiliate of a depository institution may reject an insurance policy solely because the policy has been issued or underwritten by a person who is not associated with the depository institution or affiliate when insurance is required in connection with a loan or extension of credit; (2) The loan or extension of credit and related insurance transactions shall be completed through separate documentation; and (3) A loan for premiums on required insurance, other than a loan for credit insurance premiums or flood insurance premiums, shall not be included in the primary credit without the written consent of the customer. (b) (1) (A) As a condition for extending credit or offering any product or service that is equivalent to an extension of credit, no person, depository institution, or affiliate of a depository institution may require that a customer obtain insurance from a depository institution, an affiliate of a depository institution, or a particular insurer or producer. (B) Nothing in this subchapter or § 23-60-101 et seq., shall be construed to prohibit depository institution or affiliate of a depository institution personnel from informing customers that insurance is required in order to obtain a loan or extension of credit or that loan or extension of credit approval is contingent upon the customers' obtaining acceptable insurance. (2) Depository institution or affiliate of a depository institution personnel may also inform customers that insurance is available from the depository institution, an affiliate of a depository institution, or particular unaffiliated third parties, and indicate how to obtain additional information.

Legislative History

Acts 1997, No. 900, § 4; 2001, No. 1728, § 3; 2003, No. 1747, § 11.