Cal. Code Regs. Tit. 10, § 2510.9 - Policy Form Requirements

Mortgage guaranty insurance policy forms, defined in Section 12640.02(a) of the California Insurance Code and issued for delivery in this State, shall contain the following:

(a) An insuring clause;

(b) A schedule specifying the effective date of coverage, the policy period, and the insurance premium applied;

(c) Renewal provision;

(d) Definitions;

(e) Conditions precedent to filing a claim, if applicable, including but not necessarily limited to:

(1) The presence of adequate hazard insurance covering damage to the property at the time of loss;

(2) Payment of all taxes;

(3) Payment of all sales expenses;

(4) Payment of all foreclosure costs;

(f) A condition precedent to payment in the event of default providing the insured must restore the property to its condition at the time of issuance of the policy, reasonable wear and tear being expected;

(g) A condition describing in full detail the loss provisions and recoveries to be received by the insured or its beneficiary on both settlement options applicable to the insurer as provided for under Section 12640.09 (a) of the California Insurance Code;

(h) A provision that the insurer has the option to pay the loss limits or acquire title. If a claim is submitted for settlement, the option may be elected and exercised only by the insurer who shall use its best judgement in determining the method of settlement that will minimize its loss;

(i) A filing of claims provision which shall set forth the place of filing and reporting, and to whom it is applicable;

(j) The legal rights agreement, if any;

(k) A waiver of conditions provision, if applicable;

(l) A conflict of laws provision providing for conformity with California law;

(m) In addition to the other policy form requirements set forth in this Section, a pool insurance policy shall be subject to the following:

(1) The aggregate loss limits provision contained in a policy covering a pool of mortgages shall not be made subject to adjustment, either directly or indirectly, to reflect the profit or excess of net proceeds received by the insurer from the sale of the property over and above the actual loss of the lender, when the insurer has elected to acquire the property in settlement of a claim, and the insurer shall not be permitted, directly or indirectly, to credit or refund any such excess or profit to the insured or any other party to the pooled insurance arrangement, and

(2) It must contain a provision setting forth the insurer's conditions established pursuant to Section 2510.18 of this Article, as well as the procedures under which the final premium will be charged against the equivalent amount available under the aggregate loss limit set forth in the pool insurance policy, or any other method agreeable to the insurer and the insured which satisfies the requirements of Section 2510.18 of this Article.

Notes

Cal. Code Regs. Tit. 10, § 2510.9

1. New section filed 8-23-78; effective thirtieth day thereafter (Register 78, No. 34).

1. New section filed 8-23-78; effective thirtieth day thereafter (Register 78, No. 34).