26.1-04-04. Coercing purchaser or borrower to insure with particular company or insurance producer prohibited

26.1-04-04. Coercing purchaser or borrower to insure with particular company or

insurance producer prohibited.

1. No person, engaged in selling property or in the business of financing the purchase of

property or of lending money on the security of property and no trustee, director,

officer, agent, or other employee of the person may require, as a condition precedent,

concurrent, or subsequent to the sale or financing the purchase of the property or to

lending money upon the security of a mortgage thereon or for the renewal or extension

of any such loan or mortgage or for the performance of any other act in connection

therewith, that the person purchasing the property or for whom the purchase is to be

financed or to whom the money is to be loaned or for whom the extension, renewal, or

other act is to be granted, or performed, negotiate any insurance policy or renewal

thereof covering the property through a particular insurance company or insurance

producer.

2. This section does not prevent the exercise by any person of the right to designate

reasonable financial requirements as to the insurance company, the terms and

provisions of the policy, and the adequacy of the coverage with respect to insurance

on property pledged or mortgaged to the person; nor does this section prohibit the

right of any person from voluntarily negotiating or soliciting the placing of such

insurance; nor does this section forbid the securing of insurance or renewal thereof at

the request of the purchaser or borrower or because of the failure of the purchaser or

borrower to furnish the necessary insurance or renewal thereof.

3. Violation of this section constitutes an unfair insurance practice. The person violating

this section must be proceeded against under this chapter.