§ 24-4.5-4-108 — Prepayment by proceeds of consumer credit insurance; refund required; documentation; amount; interest; civil penalty

Refund or Credit Required; Amount —
(1) Upon prepayment in full of a consumer credit sale or consumer loan
by the proceeds of consumer credit insurance, the debtor or the debtor's
estate is entitled to a refund of:
(a) any portion of a separate charge for insurance which by reason
of prepayment is retained by the creditor or returned to the
creditor by the insurer unless the charge was computed from time
to time on the basis of the balances of the debtor's account; and
(b) any portion of an additional charge that is:
(i) assessed in accordance with IC 24-4.5-2-202(1)(c), IC 24-4.5-2-202(1)(h), IC 24-4.5-3-202(1)(e), or IC 24-4.5-3-202(1)(k); and
(ii) subject to rebate upon prepayment.
(2) This chapter does not require a creditor to grant a refund or
credit to the debtor if all refunds and credits due to the debtor under
this chapter amount to less than one dollar ($1), and except as provided
in subsection (1) does not require the creditor to account to the debtor
for any portion of a separate charge for insurance because:
(a) the insurance is terminated by performance of the insurer's
obligation;
(b) the creditor pays or accounts for premiums to the insurer in
amounts and at times determined by the agreement between them;
or
(c) the creditor receives directly or indirectly under any policy of
insurance a gain or advantage not prohibited by law.
(3) Except as provided in subsection (2), the creditor or the
creditor's assignee shall promptly make an appropriate refund or credit
to the debtor for any separate charge made for insurance or for an
additional charge described in subsection (1)(b) if:
(a) the insurance is not provided or is provided for a term shorter
than the term for which the charge to the debtor for insurance was
computed; or
(b) the insurance or the protection provided in exchange for the
additional charge described in subsection (1)(b) terminates prior
to the end of the scheduled term of the coverage because of
prepayment in full or otherwise.
(4) An initial creditor, a subsequent creditor, or an assignee of an
initial or a subsequent creditor, shall maintain documentation of any
account that is subject to a refund or credit under this section. The
information maintained under this subsection shall be made available
to the department as necessary to determine compliance with this
section.
(5) A refund or credit required by subsection (3)(a) is appropriate
as to amount if it is computed according to a method prescribed or
approved by the insurance commissioner or a formula filed by the
insurer with the insurance commissioner at least thirty (30) days before
the debtor's right to a refund or credit becomes determinable, unless the
method or formula is used after the insurance commissioner notifies the
insurer that it is disapproved.
(6) If a refund or credit required by subsection (1) or (3) is not made
to the debtor within sixty (60) days after the date the debt is terminated,
due to prepayment in full or otherwise, the creditor shall pay to the
debtor for each day after the sixty (60) day period has expired an
amount equal to the daily interest at the contracted annual percentage
rate on the amount of the refund required by subsection (1) due at the
time of prepayment or termination. The director may impose an
additional civil penalty of not greater than one thousand dollars
($1,000) per occurrence if a creditor engages in a pattern or practice of
failing to comply with this subsection.
Formerly: Acts 1971, P.L.366, SEC.5. As amended by
P.L.122-1994, SEC.29; P.L.172-1997, SEC.7; P.L.213-2007, SEC.13;
P.L.217-2007, SEC.12; P.L.90-2008, SEC.12; P.L.176-2019,
SEC.22.