Hazard insurance coverage (Repealed)

(a) Property subject to a CHFA mortgage loan shall be covered by hazard insurance as follows: (1) Fire and customary extended coverage insurance in an amount sufficient to cover the outstanding principal balance of such loan or the full insurable value of the improvements on the mortgaged property, whichever is less. The amount of coverage may not be less than the amount required by a mortgage insurer or guarantor nor be required to exceed the maximum amount permitted by applicable statutes. (2) A participating lender shall be responsible for and shall be deemed to guarantee compliance with the provisions of the Flood Disaster Protection Act of 1973, whenever such provisions are applicable to any CHFA mortgage loan. If mortgaged property is located in an area having special flood hazards, as identified by the Secretary of Housing and Urban Development, flood insurance shall be maintained in the amount of the outstanding principal balance of the CHFA mortgage loan or the maximum limit of the coverage available under the National Flood Insurance Act of 1968, as amended, whichever is less. (3) Hazard insurance policies may provide for a deductible up to the amount of one hundred (100) dollars for each event of loss, applicable to either fire or extended coverage or both. (4) Each hazard insurance policy shall be issued by a hazard insurance carrier licensed to do business in Connecticut. (5) Hazard insurance shall be in effect on the closing date of a CHFA mortgage loan and the premium therefore shall be paid in advance for a full year from the closing date. (6) The participating lender shall notify CHFA whenever the provisions of this section are not complied with. (b) Insurance policy requirements are as follows: (1) All policies of hazard insurance shall contain a mortgagee clause naming "Connecticut Housing Finance Authority and/or its successors and assigns, as their interests may appear" as the loss payee. (2) All policies of hazard insurance shall provide that the insurance carrier will provide written notice to CHFA at least ten (10) days in advance of the effective date of any change or cancellation of a policy. (3) A participating lender shall give any notices necessary to fully protect the interest of CHFA as first lienholder under the terms of any insurance policy under which CHFA has an interest and under applicable law. (c) Insurance policies shall not be accepted by a participating lender or CHFA if: (1) under the terms of the insurance carrier's charter, bylaws or policy, contributions may be required to be made by, or assessments be made against, CHFA or its assigns; or (2) contributions may be required to be made by, or assessments made against, a borrower, which may become a lien against property prior to the lien of a CHFA mortgage; or (3) by the terms of the insurance carrier's charter, bylaws, or policy, loss payments are contingent upon action by such carrier's board of directors, policyholders, or members; or (4) the insurance policy includes any limiting conditions that may prevent CHFA or the borrower from collecting insurance proceeds payable under the policy.