SECTION 66. Required insurance; limitation

A bank, lending institution, mortgage company or any mortgagee doing business in the commonwealth, when making a mortgage loan, shall not require, as a condition of a mortgage or as a term of a mortgage deed, that the mortgagor purchase casualty insurance on property which is the subject of the mortgage in an amount in excess of the replacement cost of the buildings or appurtenances on the mortgaged premises.

For purposes of this section, a bank, lending institution, mortgage company or mortgagee shall include, but not be limited to, any bank as defined in section one of chapter one hundred and sixty-seven, any national bank, national banking association, federal savings bank, federal savings and loan association and federal credit union. The terms ''replacement cost'', ''buildings'' or ''appurtenances'' as used in this section shall be consistent in meaning with such terms as used in policy forms approved by the commissioner of insurance.

A lender shall not finance, directly or indirectly, any credit life, credit disability, credit unemployment insurance, credit property insurance, including debt cancellation or suspension agreements, or any other life or health insurance premium through a home mortgage loan. Premiums on insurance calculated and payable on a monthly basis by the borrower shall not be considered financed by the lender.