(a)A creditor shall not impose charges, including premium costs and related interest and finance charges, on a debtor for creditor-placed insurance coverage unless adequate disclosure of the requirement to maintain insurance has been made to the debtor. Adequate disclosure is accomplished if the following occurs:
(1)The credit agreement sets forth the requirement that the debtor must maintain insurance on the collateral as provided for in § 23-101-111 ;
(2)The creditor makes reasonable efforts to notify the debtor of the requirement to maintain insurance and allows a reasonable time for compliance with this requirement;
(3)A final notice as required by this chapter is sent to the debtor; and (4) If creditor-placed insurance coverage is issued, a copy of the policy or certificate is sen
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(a) A creditor shall not impose charges, including premium costs and related interest and finance charges, on a debtor for creditor-placed insurance coverage unless adequate disclosure of the requirement to maintain insurance has been made to the debtor. Adequate disclosure is accomplished if the following occurs: (1) The credit agreement sets forth the requirement that the debtor must maintain insurance on the collateral as provided for in § 23-101-111 ; (2) The creditor makes reasonable efforts to notify the debtor of the requirement to maintain insurance and allows a reasonable time for compliance with this requirement; (3) A final notice as required by this chapter is sent to the debtor; and (4) If creditor-placed insurance coverage is issued, a copy of the policy or certificate is sent to the debtor as provided for in § 23-101-107 . (b) (1) After adequate disclosure of the request to maintain insurance has been made to the debtor as required by this section, a creditor may proceed to impose charges for creditor-placed insurance if the debtor fails to provide evidence of insurance. (2) A creditor may impose charges no earlier than ten (10) calendar days after sending the final notice. (c) Reasonable efforts to notify the debtor are accomplished if: (1) The creditor mails a notice by first class mail to the debtor's last known address as contained in the creditor's records, stating that the creditor intends to charge the debtor for creditor-placed insurance coverage on the collateral if the debtor fails to provide evidence of the property insurance to the creditor; (2) The creditor allows the debtor at least twenty (20) calendar days to respond to the notice and provide evidence of acceptable insurance coverage before sending a final notice; and (3) (A) The creditor sends a final notice in compliance with this section by first class mail to the debtor's last known address as contained in the creditor's records at least ten (10) calendar days before the cost of insurance is charged to the debtor by the creditor. (B) Proof of the mailing of the final notice shall be retained for at least three (3) years following the expiration or termination of the coverage or as otherwise required by law. (d) The initial notice shall be in a form determined by the creditor to remind the debtor of the requirement to maintain insurance on the collateral. The final notice shall be as complete as the following notice, printed in not less than 12-point type, and modified when necessary to fit the nature of the credit transaction: Click here to view form. (e) (1) All creditor-placed insurance shall be set forth in an individual policy or certificate of insurance. (2) Not earlier than the sending of the final notice nor fifteen (15) days after a charge is made to the debtor for creditor-placed insurance coverage, the creditor shall cause a copy of the individual policy, certificate, or other evidence of insurance coverage evidencing the creditor-placed insurance coverage to be sent, first class mail, to the debtor's last known address. (f) A creditor's compliance with or failure to comply with this chapter shall not be construed to require the creditor to purchase insurance coverage on the collateral, and the creditor shall not be liable to the debtor or a third party as a result of its failure to purchase the insurance.