38.2-205.1 - Temporary contracts of insurance permitted. - Virginia Statutes

§ 38.2-205.1. Temporary contracts of insurance permitted.

A lender engaged in making or servicing real estate mortgage or deed of trustloans on one to four family residences shall accept as evidence of insurancea temporary written contract of insurance meeting the requirements of §38.2-2112 and issued by any duly licensed agent, broker, or insurancecompany. Nothing herein prohibits the lender from disapproving such insurerprovided such disapproval is reasonable. Such lender need not accept a binderunless such binder (i) includes the name and address of the insured, name andaddress of the mortgagee, a description of the insured collateral, and aprovision that it may not be cancelled within the term of the binder exceptupon ten days' written notice to the mortgagee; (ii) is accompanied by a paidreceipt for one year's premium, except in the case of the renewal of a policysubsequent to the closing of a loan; and (iii) includes an undertaking ofagent to use his best efforts to have the company issue a policy withinforty-five days, unless the binder is cancelled. The Bureau of Insurance mayby administrative letter require binders to contain such additionalinformation as may be necessary to permit such binders to comply with thereasonable requirements of the Federal National Mortgage Association orFederal Home Loan Mortgage Corporation for purchase of mortgage loans.

(1987, c. 10.)