Commercial Law, 2012 Bar — Question 37

MULTIPLE CHOICE

A house and lot is covered by a real estate mortgage (REM) in favor of ZZZ Bank. The bank required that the house be insured. The owner of the policy failed to endorse nor assign the policy to the bank. However, the Deed of Real Estate Mortgage hasan express provision which says that the insurance policy is also endorsed with the signing of the REM. Will this be sufficient? A) No, insurance policy must be expressly endorsed to the bank so that the bank will have a right in the proceeds of such insurance in the event of loss. B) The express provision contained in the Deed of Real Estate Mortgage to the effect that the policy is also endorsed is sufficient. C) Endorsement of Insurance Policy in any form is not legally allowed. D) Endorsement of the Insurance Policy must be in a formal document to be valid.

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