N.Y. Banking Law § 357: Insurance

§ 357. Insurance. 1. The licensee may require a borrower, on loans of

two hundred and fifty dollars or more, excluding insurance premiums and

precomputed interest, to insure tangible personal property, except

household goods, taken as security for a loan against any substantial

risk of loss, damage or destruction for an amount not to exceed the

lesser of the reasonable value of the property insured or the principal

amount of the loan, and for the customary insurance term approximating

the term of the loan contract. The policy may insure the interest of the

borrower as well as the interest of the licensee. A policy covering a

motor vehicle securing the loan may also insure the borrower against

liability for bodily injury and property damage, but such liability

insurance shall be at the option of the borrower and shall not be

required by the licensee. The premiums for all such insurance shall not

exceed the premiums chargeable in accordance with rate filings made with

the superintendent of financial services for such insurance by the

insurer. Such insurance shall be written by, or through, a duly licensed

insurance agent or broker, or shall be provided directly by a company

qualified to do business in this state.

2. For purposes of this section, the term "household goods" shall mean

clothing, furniture, appliances, one radio and one television, linens,

china, crockery, kitchenware, and personal effects (including wedding

rings) owned by the consumer and his or her dependents, but shall not

include works of art, other electronic entertainment equipment, items

acquired as antiques, and other jewelry.

3. When a licensee provides credit life insurance, credit accident and

health insurance, or credit unemployment insurance, or credit property

insurance pursuant to section two thousand three hundred forty of the

insurance law, or any combination thereof with respect to one or more

borrowers, such licensee may collect from the borrower a premium or

identifiable charge which shall not exceed the premium rates or

identifiable charges chargeable in accordance with rate filings made

with the superintendent of financial services for such insurance by the

insurer, subject to a refund of the insurance charge computed as

provided in paragraph (a) of subdivision five of section three hundred

fifty-one of this article, in the event of prepayment by cash, a new

loan, refinancing or otherwise. Only one such amount may be collected in

connection with any loan contract irrespective of the number of obligors

and only one obligor need be insured.

4. The insurance authorized by this section, with the exception of

insurance provided under group insurance policies, may be written by or

arranged through the licensee or an affiliate, associate or employee of

the licensee only if such licensee, affiliate, associate or employee is

a duly licensed insurance agent or broker, provided, however, no

licensee shall decline new or existing insurance which meets or exceeds

the standards set forth in this section, nor prevent any borrower from

obtaining such insurance coverage from other sources.

5. If a borrower procures such insurance by or through a licensee, the

statement required by section three hundred fifty-two of this article

shall disclose the cost or rate of charge to the borrower and the type

of insurance, and the licensee shall cause to be delivered to the

borrower a copy of the policy, certificate, or other evidence therefor

within a reasonable time.

6. The insurance authorized by this section and all benefits or

returns therefrom accruing to the licensee or to any affiliate,

associate or employee of the licensee shall not be prohibited by any

other provision of this article.

7. No insurance shall be required, requested, sold or offered for sale

in connection with any loan made under this article, except as and to

the extent authorized by this section or as provided in subdivision six

of section three hundred fifty-one of this article.

If the borrowers on any loan are husband and wife, joint credit life

insurance and joint credit accident and health insurance may be issued

on such loan pursuant to this section.