675.300 - Insurance as security for loans: Conditions; limitations.
675.300 Insurance as security for loans: Conditions; limitations.
1. A licensee may request that a borrower insure tangible property when offered as security for a loan under this chapter against any substantial risk of loss, damage or destruction for an amount not to exceed the actual value of the property and for a term and upon conditions which are reasonable and appropriate considering the nature of the property and the maturity and other circumstances of the loan.
2. A licensee may require that a borrower provide title insurance on real property offered as security for a loan under this chapter. The title insurance must be placed through a title insurance company authorized to do business in this state.
3. A licensee may provide, obtain or take as security for a loan:
(a) Insurance on the life and on the health or disability, or both, of one or more parties obligated on the loan;
(b) Involuntary unemployment insurance;
(c) Insurance which protects his or her interest in the collateral pledged for the loan;
(d) Single interest nonfiling insurance; or
(e) Any other credit-related insurance approved by the Commissioner,
Ê if the insurance complies with the applicable provisions of chapter 690A of NRS.
4. In accepting any insurance provided by this section as security for a loan, the licensee may include the premiums or identifiable charge as part of the principal or may deduct the premiums or identifiable charge therefor from the proceeds of the loan, which premium or identifiable charge must not exceed those filed with and approved by the Commissioner of Insurance, and remit those premiums to the insurance company writing the insurance, and any gain or advantage to the licensee, any employee, officer, director, agent, affiliate or associate from the insurance or its sale may not be considered as additional or further charge in connection with any loan made under this chapter. Not more than one policy of life insurance and one policy providing accident and health coverage may be written by a licensee in connection with any loan transaction under this chapter, and a licensee shall not require the borrower to be insured as a condition of any loan. If the unpaid balance of the loan is prepaid in full by cash or other thing of value, refinancing, renewal, a new loan or otherwise, the charge for any credit life insurance and any credit accident and health insurance must be refunded or credited as prescribed in chapter 690A of NRS. The insurance must be written by a company authorized to conduct business in this state, and the licensee shall not require the purchase of the insurance from any agent or broker designated by the licensee.
5. The amount charged to a debtor by a licensee for any type of coverage under a policy of insurance provided by this section as security for a loan must not exceed the amount of the premium. In the case of a single interest nonfiling policy of insurance, the amount charged to a debtor by a licensee must not exceed the amount charged by a county recorder for filing and releasing documents pursuant to NRS 104.9525.
6. As used in this section, “single interest nonfiling insurance” means a contract of insurance for which a lender pays a predetermined fee, which affords coverage to a lender in connection with a specific loan, and which is obtained by the lender in lieu of perfecting a security interest pursuant to chapter 104 of NRS.
(Added to NRS by 1959, 233; A 1967, 976; 1971, 226, 1369, 1927, 1960; 1973, 1519; 1979, 828; 1987, 2303; 1993, 2045; 1999, 393)