PRINTER'S NO. 426
No. 418 Session of 2001
INTRODUCED BY ARMSTRONG, TARTAGLIONE, M. WHITE, WOZNIAK,
THOMPSON, WENGER, WAUGH, EARLL AND KASUNIC, FEBRUARY 12, 2001
REFERRED TO BANKING AND INSURANCE, FEBRUARY 12, 2001
AN ACT
1 Regulating the amount of property insurance coverage required by
2 certain lenders.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 Section 1. Restriction.
6 (a) General rule.--No lender may require a borrower, as a
7 condition of obtaining or maintaining a secured loan, to obtain
8 property insurance coverage which exceeds the replacement value
9 of buildings and structures situate on the land used to secure
10 the loan. In no case shall the borrower be required to insure
11 the value of the land.
12 (b) Definitions.--As used in this section, the following
13 words and phrases shall have the meanings given to them in this
14 subsection:
15 "Lender." A bank, savings bank, savings and loan
16 association, credit union, mortgage bank, mortgage broker,
17 finance company, consumer discount company and any other
18 financial institution or person who lends money to any borrower
1 upon which a mortgage is given by the borrower or a lien is
2 placed against such property as security for the loan.
3 "Property insurance coverage." Property insurance against
4 losses caused by perils that commonly are covered in insurance
5 policies described with terms similar to "standard fire" or
6 "standard fire with extended coverage."
7 Section 2. Effective date.
8 This act shall take effect immediately.
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