BILL NUMBER: AB 1454	CHAPTERED  09/16/99

	CHAPTER   412
	FILED WITH SECRETARY OF STATE   SEPTEMBER 16, 1999
	APPROVED BY GOVERNOR   SEPTEMBER 16, 1999
	PASSED THE ASSEMBLY   AUGUST 31, 1999
	PASSED THE SENATE   AUGUST 24, 1999
	AMENDED IN SENATE   AUGUST 19, 1999
	AMENDED IN SENATE   JULY 1, 1999

INTRODUCED BY   Committee on Insurance (Scott (Chair),  Calderon,
Floyd, Gallegos, Havice, Keeley, and Wayne)

                        FEBRUARY 26, 1999

   An act to amend Section 2955.5 of the Civil Code, relating to
hazard insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1454, Committee on Insurance.  Hazard insurance.
   Existing law prohibits a lender from requiring a borrower, as a
condition of receiving or maintaining a loan secured by real
property, to provide hazard insurance coverage against risks to the
improvements, as defined, on that real property in an amount
exceeding the replacement value of the improvements on the property.

   This bill would require the lender, as of July 1, 2000, to
disclose this fact to the borrower in writing, as soon as
practicable, but before execution of any note or security document.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 2955.5 of the Civil Code is amended to read:
   2955.5.  (a) No lender shall require a borrower, as a condition of
receiving or maintaining a loan secured by real property, to provide
hazard insurance coverage against risks to the improvements on that
real property in an amount exceeding the replacement value of the
improvements on the property.
   (b) A lender shall disclose to a borrower, in writing, the
contents of subdivision (a), as soon as practicable, but before
execution of any note or security documents.
   (c) Any person harmed by a violation of this section shall be
entitled to obtain injunctive relief and may recover damages and
reasonable attorney's fees and costs.
   (d) A violation of this section does not affect the validity of
the loan, note secured by a deed of trust, mortgage, or deed of
trust.
   (e) For purposes of this section:
   (1) "Hazard insurance coverage" means insurance against losses
caused by perils which are commonly covered in policies described as
a "Homeowner's Policy," "General Property Form," "Guaranteed
Replacement Cost Insurance," "Special Building Form," "Standard Fire,"
"Standard Fire with Extended Coverage," "Standard Fire with Special
Form Endorsement," or comparable insurance coverage to protect the
real property against loss or damage from fire and other perils
covered within the scope of a standard extended coverage endorsement.

   (2) "Improvements" means buildings or structures attached to the
real property.
  SEC. 2.  Section 1 of this bill shall become operative on July 1,
2000.