Section 2502*2. Designation of particular insurer, agent or broker in property financing transactions

(a)  No  person, firm or corporation  engaged in the business of financing the purchase of  real  or  personal
  property, lending money on the security thereof, or servicing a mortgage
  thereon,  and none of its trustees, directors, officers, agents or other
  employees, shall require, as a condition precedent to financing any such
  purchase or making any such loan or renewing or extending any such  loan
  or  mortgage  or  performing any other act in connection therewith, that
  the person, firm or corporation for whom the transaction  is  undertaken
  negotiate  any  policy  of  insurance  or  renewal thereof covering such
  property through a particular insurance company, agent or broker.
    (b) This section shall not  prevent  the  exercise  of  any  right  to
  approve  or  disapprove  of the insurance company selected to underwrite
  the insurance, except that in exercising such right, whether pursuant to
  this section or any other law, such person, firm, or corporation and its
  trustees, directors, officers, agents and employees shall not:
    (1) discriminate against an insurance company which issues a policy of
  insurance that is non-assessable as to any designated mortgagee  or  any
  secured  creditor  designated  as  a loss payee because of the insurer's
  type of organization, or
    (2) refuse to accept an insurance policy because it was not negotiated
  through a particular insurance company, agent or broker.
    (c) No such person, firm or  corporation  shall,  in  connection  with
  compliance  with  a covenant to insure, require that the person, firm or
  corporation for whom the purchase of the property is financed or to whom
  a mortgage loan is made or who owns the property  shall  pay  a  fee  or
  other charge as a condition to accepting, during the unexpired term of a
  policy then held, another policy of insurance in substitution therefor.
    * NB Effective September 10, 2011