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shall be payable to, the Association (or a qualified insurance trustee selected by it) as <br />trustee for the benefit of the Owners and secured parties including Eligible Mortgagees, <br />which suffer loss. The Association, or any insurance trustee selected by it, shall have <br />exclusive authority to negotiate, settle and collect upon any claims or losses under any <br />insurance policy maintained by the Association. <br />Section 4. Waivers of Subrogation. All policies of insurance shall <br />contain waivers of subrogation by the insurer against the Association, or an Owner, <br />members of the Owner's household, officers or directors, as applicable, and if available, <br />waivers of any defense based on co- insurance or of invalidity from any acts of the <br />insured. <br />Section 5. Cancellation: Notice of Loss. All policies of property <br />insurance and comprehensive liability maintained by the Association shall provide that <br />the polices shall not be cancelled or substantially modified, for any reason, without at <br />least 30 days prior written notice to the Association, to the FHA or FNMA (if applicable), <br />all of the insureds and all Eligible Mortgagees. <br />Section 6. Restoration in Lieu of Cash Settlement. All policies of <br />property insurance maintained by the Association shall provide that, despite any <br />provision giving the insurer the right to elect to restore damage in lieu of a cash <br />settlement, such option shall not be exercisable (i) without the prior written approval of <br />the Association (or any Insurance Trustee or (ii) when in conflict with provisions of any <br />insurance trust agreement to which the Association may be a party, or any requirement <br />of law. <br />Section 7. No Contribution. All policies of insurance maintained by the <br />Association shall be the primary insurance where there is other insurance in the name <br />- 2 5 - <br />