A. It is unlawful for any person licensed under the New Mexico Small Loan Act of 1955, in connection with the making of a loan under that act:

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(1)     to sell life insurance other than a term policy or credit life insurance on the principal borrowers;

(2)     to sell term or credit life insurance the coverage of which exceeds the amount of the loan or extends beyond the term for which the loan is made;

(3)     after having made a loan, to finance any premiums of any life insurance policies, other than credit life insurance, sold to the borrower by the licensee or the licensee’s agent in any manner for a period of ninety days;

(4)     after having made a loan, to finance any premium of any single-interest property insurance policy sold to the borrower by the licensee or the licensee’s agent whereby the premium would be charged to the borrower in any manner. Nothing in this section shall preclude the sale and purchase of an insurance policy covering the dual interest of borrower and lien holder; or

(5)     to sell property insurance on unsecured loans.

B. A lender may charge for only the actual cost of any insurance; provided that all insurance shall be written by a company licensed to operate within the state and at a rate not higher than those approved by the superintendent of insurance; and provided further that the lender shall not require any insurance to be written or provided by or through a particular agent, broker or insurer as a condition to making the loan, but shall, at the borrower’s option, permit the insurance to be procured from any insurer or agent authorized by law to provide the insurance.