N.J. Admin. Code § 3:1-13.1

Current through Register Vol. 57, No. 1, January 6, 2025

Section 3:1-13.1 - Insurance tie-in prohibition

(a) No lender shall require any borrower to obtain insurance from a licensed insurance agent or broker, owned by or controlled directly or indirectly by that lender, as a precondition for obtaining financing.

(b) In the event a loan or other financing is granted for personal, family or household purposes, and if insurance is required and is available through the lender, the terms of the loan agreement or a separate written notice to the borrower shall state that the borrower has the option of securing such insurance from a source of the borrower's own choosing. Nothing herein shall prevent the lender from reserving the right to refuse to accept, for reasonable cause, an insurer or insurance offered by the consumer; provided however, the lender must give written notice to the consumer stating specific reasons why insurance coverage provided by the consumer is unacceptable to the lender.

(c) No lender shall, in connection with any application for a loan secured by a mortgage on real property located in New Jersey, require any mortgagor to obtain by purchase or otherwise a fire insurance policy in excess of the replacement value of the covered premises as permitted under N.J.S.A. 17:36-5.1 9 as a condition for granting such mortgage loan.

(d) For purposes of this section, the term "lender" means any bank, savings bank, savings and loan association, credit union, licensed lender, banking institution, bank holding company, savings and loan service corporation or any other person, or any subsidiary or affiliate thereof, who makes a loan secured by a first, second or subsequent mortgage on real property located in New Jersey.

N.J. Admin. Code § 3:1-13.1

Amended by R.1984 d.209, effective 6/4/1984.
See: 16 New Jersey Register 586(a), 16 New Jersey Register 1338(a).
Added "provided however, the ... to the lender."
Amended by R.2001 d.112, effective 4/2/2001.
See: 33 New Jersey Register 213(a), 33 New Jersey Register 1087(a).
In (a), deleted "banking institution, bank holding company, savings and loan association, savings and loan association service corporation, credit union or any other type of" preceding "lender"; in (b), substituted "lender" for "lending institution"; inserted new (c) and (d).