Current through Register Vol. 54, No. 7, April 4, 2022
Mortgage lenders are subject to the provisions concerning insurance set forth
(b) If insurance is lawfully required or
obtained in connection with a loan, the insurance shall be written or obtained
by or through an insurance producer who is licensed in good standing in this
State, and written by an insurance company authorized to do business in this
(c) It shall be the
responsibility of the mortgage lender to explain clearly to each borrower the
benefits and limitations of any credit life insurance, credit health or
disability insurance, or credit involuntary unemployment insurance which the
borrower contemplates getting in connection with a loan.
(d) Each mortgage lender shall keep a record
of all policies for credit life insurance, credit health or disability
insurance, or credit involuntary unemployment insurance sold to a borrower in
connection with a loan, all premiums collected in connections with such loans,
all refunds of unearned premiums caused by payment in full of an amount or by
renewal, and a detailed record of all claims paid by the insurer.
(e) If a mortgage lender collects a premium
from a borrower for credit life insurance, credit health or disability
insurance, or credit involuntary unemployment insurance, and such insurance
does not become effective, the mortgage lender shall immediately give written
notice to the borrower and shall promptly refund to or credit to the account of
the borrower the amount collected from him or charged to him for such
(f) If a credit life
policy issued in connection with a loan contains no provision for designation
of a second beneficiary, it shall be handled under the usual procedure
contained in a facility of payment clause authorizing the insurance company to
pay any insurance in excess of the unpaid balance of the indebtedness to the
estate, wife, husband, children or other blood relative or person equitably
entitled thereto as determined by the insurance company.
N.J. Admin. Code §
Amended by R.2010 d.129,
effective 6/21/2010 (operative July 31, 2010).
See: 41 N.J.R.
2829(a), 42 N.J.R. 1139(b).
Section was "Insurance matters for
mortgage bankers, correspondent mortgage bankers, secondary lenders and
consumer lenders". Deleted "bankers, correspondent mortgage bankers, secondary
lenders and consumer" preceding "lender" throughout; in (a), updated the