1. No person may do any of the following:

 a. Require, as a condition precedent to the lending of money or extension of credit, or any renewal thereof, that the person to whom such money or credit is extended or whose obligation the creditor is to acquire or finance, negotiate any policy or contract of insurance through a particular insurer or group of insurers or agent or broker or group of agents or brokers.
 b. Unreasonably disapprove the insurance policy provided by a borrower for the protection of the property securing the credit or lien.
 c. Require directly or indirectly that any borrower, mortgagor, purchaser, insurer, broker, or agent pay a separate charge in connection with the handling of any insurance policy required as security for a loan on real estate or pay a separate charge to substitute the insurance policy of one insurer for that of another.
 d. Use or disclose information resulting from a requirement that a borrower, mortgagor or purchaser furnish insurance of any kind on real property being conveyed or used as collateral security to a loan, when such information is to the advantage of the mortgagee, vendor, or lender, or is to the detriment of the borrower, mortgagor, purchaser, insurer, or the agent or broker complying with such a requirement.

Terms Used In Iowa Code 507B.5

  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
  • Insurer: means a life insurance company regulated under chapter 508. See Iowa Code 507B.4C
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Money: means the same as defined in section 554. See Iowa Code 554E.1
  • Mortgagee: The person to whom property is mortgaged and who has loaned the money.
  • Mortgagor: The person who pledges property to a creditor as collateral for a loan and who receives the money.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • Person: shall mean any individual, corporation, association, partnership, reciprocal exchange, interinsurer, fraternal beneficiary association, and any other legal entity engaged in the business of insurance, including insurance producers and adjusters. See Iowa Code 507B.2
  • Policy: means any policy or certificate of life insurance issued in this state. See Iowa Code 507B.4C
  • Precedent: A court decision in an earlier case with facts and law similar to a dispute currently before a court. Precedent will ordinarily govern the decision of a later similar case, unless a party can show that it was wrongly decided or that it differed in some significant way.
  • property: includes personal and real property. See Iowa Code 4.1
 2. Subsection 1, paragraph “c” of this section does not include the interest which may be charged on premium loans or premium advancements in accordance with the security instrument.
 3. For purposes of subsection 1, paragraph “b” of this section, such disapproval shall be deemed unreasonable if it is not based solely on reasonable standards uniformly applied, relating to the extent of coverage required and the financial soundness and the services of an insurer. Such standards shall not discriminate against any particular type of insurer, nor shall such standards call for the disapproval of an insurance policy because such policy contains coverage in addition to that required.
 4. If a violation of this section is found, the person in violation shall be subject to the same procedures and penalties as are applicable to other provisions of this chapter.
 5. For purposes of this section, “person” includes any individual, corporation, association, partnership, or other legal entity.
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