§ 26.1-37-05 — Amount of consumer credit insurance

1. a. Except as otherwise provided in this subsection, the initial amount of credit life
insurance may not exceed the total amount repayable under the contract of
indebtedness and, when an indebtedness is repayable in substantially equal
installments, the amount of insurance may not exceed the scheduled or actual
amount of unpaid indebtedness, whichever is greater. Insurance on agricultural
loan commitments, not exceeding one year in duration, may be written up to the
amount of the loan commitment, on a nondecreasing or level term plan.
Insurance on educational loan commitments may be written for unpaid
indebtedness plus any unused commitment.
b. In the absence of any pre-existing condition exclusions, the amount of insurance
payable in the event of death due to natural causes may be limited to the balance
as the balance existed six months before the date of death if:
(1) There has been one increase or more in the outstanding balance during the
six-month period, other than those due to the accrual of interest or late
charges; and
(2) Evidence of individual insurability has not been required during the
six-month period.
c. Other patterns of insurance may be used which are not inconsistent with this
subsection, including those providing coverage for lease payments or lump sum
purchase at the end of the lease.
2. a. The total amount of periodic indemnity payable by credit accident and health
insurance or by credit unemployment insurance in the event of disability or
unemployment, as defined in the policy, may not exceed the aggregate of the
periodic scheduled unpaid installments of the gross debt; and the amount of each
periodic indemnity payment may not exceed the original gross debt divided by the
number of periodic installments.
b. Notwithstanding subdivision a, for credit accident and health insurance or for
credit unemployment insurance written in connection with an open-end credit
agreement, the amount of insurance may not exceed the gross debt which would
accrue on that amount using the periodic indemnity. Subject to any policy
maximums, the periodic indemnity may not be less than the creditor's minimum
repayment schedule.
3. a. For credit property insurance sold in conjunction with a closed-end transaction,
an insurer may not issue credit property insurance coverage unless the amount
financed exceeds three hundred dollars.
b. For credit property insurance sold in conjunction with a closed-end transaction,
the amount of credit property insurance may not exceed the underlying credit
transaction.