20-1606. Maximum amount of credit disability
insurance and credit unemployment insurance
A. The total amount of periodic indemnity payable by credit disability insurance in
the event of disability, as defined in the policy, or credit unemployment insurance, in
the event of unemployment, as defined in the policy, shall not exceed the aggregate of
the periodic scheduled unpaid installments of the gross debt or, with respect to group
insurance where the indebtedness is repayable in installments, the maximum sum permitted
by section 20-1401. The amount of each periodic indemnity payment shall not exceed the
original gross debt divided by the number of periodic installments.
B. Notwithstanding subsection A of this section:
1. For credit disability insurance or credit unemployment insurance written in
connection with an open-end credit agreement, the amount of insurance shall not exceed
the gross debt which would accrue on that amount using the periodic indemnity. Subject to
any policy maximums, the periodic indemnity shall not be less than the creditor's minimum
repayment schedule.
2. An insurer may offer credit disability insurance with a periodic or lump sum
indemnity that exceeds the creditor's minimum repayment schedule if no single indemnity
exceeds the net debt.
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