§ 27-5-6 - Binders and temporary insurance.
SECTION 27-5-6
§ 27-5-6 Binders and temporary insurance.– Binders or other contracts for temporary insurance may be made, orally or inwriting, for a period which shall not exceed thirty (30) days, and shall bedeemed to include all of the terms of the standard fire insurance policy andall applicable endorsements, approved by the director of business regulation,as may be designated in the contract of temporary insurance; except that thecancellation clause of the standard fire insurance policy, and the clausespecifying the hour of the day at which the insurance shall commence, may besuperseded by the express terms of the contract of temporary insurance;provided, that all banks and lending institutions doing business in this state,whether acting under state or federal authority, which include, but are notlimited to: (1) a bank, savings bank, or trust company, as defined in thistitle, its affiliates or subsidiaries, (2) a bank holding company as defined in12 U.S.C. § 1841, its affiliates or subsidiaries, (3) mortgage companies,and (4), any other individual, corporation, partnership, or associationauthorized to take deposits and/or to make loans of money under the provisionsof title 19, shall be required to accept an insurance binder as evidence ofinsurance from any duly licensed insurance producer or insurance company;provided, that the binders are in writing and in a form acceptable to themortgagee and indicating that the mortgagee will be listed as a loss payee onthe binder or temporary contract and that the mortgagee will be notified byregistered or certified mail in the event the binder or temporary insurance iscancelled. If a binder is utilized, a policy shall, at the request of themortgagee, be produced within thirty (30) days after the real estate closinghas been consummated. Any subsequent holder of the mortgage, as a result of thesale, transfer, conveyance, or assignment of the mortgage, shall have itsinterest automatically protected and covered in accordance with the noticerequirements in § 27-5-3.2.