20-1551. Rebates, commissions and
charges
A. A mortgage guaranty insurance company shall not pay or cause to be paid either
directly or indirectly, to any owner, purchaser, lessor, lessee, mortgagee or prospective
mortgagee of the real property which secures the authorized real estate security or which
is the fee of an insured lease, or any interest in such lease, or any person who is
acting as an agent, representative, attorney or employee of such owner, purchaser or
mortgagee, any commission, or any part of its premium charges or any other consideration
as an inducement for or as compensation on any mortgage guaranty insurance business.
B. In connection with the placement of any mortgage guaranty insurance, a mortgage
guaranty insurance company shall not cause or permit any commission, fee, remuneration or
other compensation to be paid to or received by any insured lender or lessor, any
subsidiary or affiliate of any insured, any officer, director or employee of any insured
or any member of such person's immediate family, any corporation, partnership, trust,
trade association in which any insured is a member or other entity in which any insured
or any such officer, director or employee or any member of such person's immediate family
has a financial interest, or any designee, trustee, nominee or other agent or
representative of any of the foregoing.
C. A mortgage guaranty insurance company shall not make any rebate of any portion
of the premium charge shown by the schedule required by section 20-1549, subsection B. A
mortgage guaranty insurance company shall not quote any rate or premium charge to any
person which is different than that currently available to others for the same type of
coverage. The amount by which any premium charge is less than that called for by the
current schedule of premium charges is an unlawful rebate.
D. Notwithstanding section 20-451, section 20-452, section 20-1553, subsection B or
any other provision of this section, a mortgage guaranty insurance company may enter into
an agreement with a mortgage lender or an affiliate of a mortgage lender to provide
financial incentives to the mortgage lender for the performance of the mortgage loans
insured by the mortgage guaranty insurance company. The agreement to provide financial
incentives to mortgage lenders shall not take effect unless it is filed with the director
and either approved or not disapproved within thirty days after being filed. The
director's disapproval shall be in writing and shall specify the reason for the
disapproval. The director shall approve the agreement upon finding that:
1. The agreement is not contrary to other applicable law.
2. The agreement is supported by information that establishes that the mortgage
guaranty insurer's rates are not inadequate when considered in conjunction with the
financial incentives of the agreement.
E. The director may after notice and hearing suspend or revoke the certificate of
authority of any mortgage guaranty insurance company, or in the director's discretion,
issue a cease and desist order to any mortgage guaranty insurance company which pays any
commission or makes any unlawful rebate in willful violation of the provisions of this
article. In the event of the issuance of a cease and desist order, the director may,
after notice and hearing, suspend or revoke the certificate of authority of any mortgage
guaranty insurance company which does not comply with the terms of such certificate.
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