§ 58-3-140. Temporary contracts of insurance permitted. - North Carolina Statutes

§ 58‑3‑140. Temporary contracts of insurance permitted.

A lender engaged in making orservicing real estate mortgage or deed of trust loans on one to four familyresidences shall accept as evidence of insurance a temporary written contractof insurance meeting the requirements of G.S. 58‑44‑20(4) andissued by any duly licensed insurance agent, broker, or insurance company.

Nothing herein prohibits thelender from refusing to accept a binder or from disapproving such insurer oragent provided such refusal or disapproval is reasonable.

Such lender need not accept abinder unless such binder:

(1)        Includes:

a.         The name and addressof the insured;

b.         The name and addressof the mortgagee;

c.         A description of theinsured collateral;

d.         A provision that itmay not be cancelled within a term of the binder except upon 10 days' writtennotice to the mortgagee; and

e.         The amount ofinsurance bound.

(2)        Is accompanied by apaid receipt for one year's premium, except in the case of the renewal of apolicy subsequent to the closing of a loan; and

(3)        Includes anundertaking of agent to use his best efforts to have the insurance companyissue a policy.

The Department may requirebinders to contain any additional information to permit the binders to complywith the reasonable requirements of Fannie Mae, the Government NationalMortgage Association, or the Federal Home Loan Mortgage Corporation forpurchase of mortgage loans. (1989, c. 459, s. 1; 1991, c. 720, s. 4; 2001‑487,s. 14(f).)