§ 27-30-6. Disclosure to debtors and provisions of policies and certificates of insurance.
(a) Pre-purchase disclosure. Before the debtor elects to purchase consumer credit insurance in connection with
a credit transaction, the following shall be disclosed to the debtor in writing:
(1) That the purchase of consumer credit insurance is optional and not a condition of
obtaining credit approval;
(2) If more than one kind of consumer credit insurance is being made available to the
debtor, whether the debtor can purchase each kind separately or the multiple coverages
only as a package;
(3) The conditions of eligibility;
(4) That, if the consumer has another insurance that covers the risk, he or she may not
want or need credit insurance;
(5) That within the first thirty (30) days after receiving the individual policy or group
certificate, the debtor may cancel the coverage and have all premium paid by the debtor
refunded or credited. Thereafter, the debtor may cancel the policy at any time during
the term of the loan and receive a refund of any unearned premium. However, only in
those instances where insurance is a requirement for the extension of credit, the
debtor may be required to offer evidence of alternative insurance acceptable to the
creditor at the time of cancellation;
(6) A brief description of the coverage, including a description of the amount, the term,
any exception, limitations and exclusions, the insured event, any waiting or elimination
period, any deductible, any applicable waiver of premium provision, to whom the benefits
would be paid, and the premium rate for each coverage or for all coverages in a package;
(7) That if the premium or insurance charge is financed, it will be subject to finance
charges at the rate applicable to the credit transaction.
(b) The disclosures required in subsection (a) shall be provided in the following manner:
(1) In connection with the consumer credit insurance offered contemporaneously with the
extension of credit or offered through direct mail advertisements, disclosure shall
be made in writing and presented to the consumer in a clear and conspicuous manner;
(2) In conjunction with the offer of credit insurance subsequent to the extension of credit
by other than direct mail advertisements, disclosure may be provided orally so long
as written disclosures are provided to the debtor no later than the earlier of:
(i) Ten (10) days after the offer; or
(ii) The date any other written material is provided to the debtor.
(c) All consumer credit insurance sold shall be evidenced by an individual policy, or
a group certificate of insurance which shall be delivered to the debtor.
(d) The individual policy or group certificate shall, in addition to other requirements
of law, set forth the following:
(1) The name and home office address of the insurer;
(2) The name or names of the debtor or debtors, or, in the case of a group certificate,
the identity by name or otherwise of the debtor or debtors;
(3) The premium or amount of payment by the debtor separately for each kind of coverage
or for all coverages in a package, except that for open-end loans, the premium rate
and the basis of premium calculation (e.g., average daily balance, prior monthly balance)
shall be specified;
(4) A full description of the coverage or coverages, including the amount and term thereof,
and any exceptions, limitations, and exclusions;
(5) A statement that the benefits shall be paid to the creditor to reduce or extinguish
the unpaid debt and, whenever the amount of insurance benefit exceeds the unpaid debt
that any such excess shall be payable to a beneficiary, other than the creditor, named
by the debtor, or to the debtor's estate; and
(6) If the scheduled term of insurance is less than the scheduled term of the credit transaction,
a statement to that effect on the face of the individual policy or group certificate
in not less than ten (10) point boldface type.
(e) Unless the individual policy or group certificate of insurance is delivered to the
debtor at the time the debt is incurred, or at such other time that the debtor elects
to purchase coverage, a copy of the application for the policy or a notice of proposed
insurance, signed by the debtor and setting forth the name and home office address
of the insurer, the name or names of the debtor, the premium rate or amount of payment
by the debtor for the insurance, and the amount, term, and a brief description of
the coverage provided, shall be delivered to the debtor at the time the debt is incurred
or the election to purchase coverage is made. The copy of the application for or notice
of proposed insurance shall also refer exclusively to insurance coverage, and shall
be separate and apart from the loan, sale, or other credit statement of account, instrument,
or agreement, unless the information required by this subsection is prominently set
forth therein. Upon acceptance of the insurance by the insurer and within thirty (30)
days of the date upon which the debt is incurred or the election to purchase coverage
is made, the insurer shall cause the individual policy or group certificate of insurance
to be delivered to the debtor. The application or notice of proposed insurance shall
state that upon acceptance by the insurer, the insurance shall become effective as
provided in § 27-30-5.
(f) The application, notice of proposed insurance or certificate may be used to fulfill
all of the requirements of subsections (a) and (d) of this section if it contains
all the information required by those subsections.
(g) The debtor has thirty (30) days from the date that he or she receives either the individual
policy or the group certificate to review the coverage purchased. At any time within
the thirty-day (30) period, the debtor may contact the creditor or insurer issuing
the policy or certificate and request that the coverage be canceled. The individual
policy or group certificate may require the request to be in writing or that the policy
or certificate be returned to the insurer or both. The debtor shall, within thirty
(30) days of the request, receive a full refund or credit of all premiums or insurance
charges paid by the debtor.
(h) If the named insurer does not accept the risk, the debtor shall receive a policy or
certificate of insurance setting forth the name and home office address of the substituted
insurer and the amount of the premium to be charged, and, if the amount of premium
is less than that set forth in the notice of proposed insurance, an appropriate refund
shall be made within thirty (30) days. If no insurer accepts the risk, then all premiums
paid shall be refunded or credited within thirty (30) days of application to the person
entitled thereto.
(i) For the purpose of subsection (e) of this section, an individual policy or group certificate
delivered in conjunction with an open-end consumer credit agreement or any consumer
credit insurance requested by the debtor after the date of the debt shall be deemed
to be delivered at the time the debt is incurred or election to purchase coverage
is made if the delivery occurs within thirty (30) days of the date the insurance is
effective.
(j) An individual policy or group certificate delivered in conjunction with an open-end
credit agreement shall continue from its effective date through the term of the agreement
unless the individual policy or group certificate is terminated in accordance with
its terms at an earlier date.