16a-4-108.   (UCCC) Refund or credit required; amount.(1) Upon prepayment in full of a consumer credit sale or consumer loanby the proceeds of consumer credit insurance, the consumer or his estate isentitled to a refund of any portion of a separate charge for insurancewhich by reason or prepayment is retained by the creditor or returned tohim by the insurer unless the charge was computed from time to time on thebasis of the balances of the consumer's account.

      (2)   This article does not require a creditor to grant a refund or creditto the consumer if all refunds and credits due to him under this articleamount to less than one dollar ($1), and except as provided in subsection(1) does not require the creditor to account to the consumer for anyportion of a separate charge for insurance because

      (a)   the insurance is terminated by performance of the insurer'sobligation;

      (b)   the creditor pays or accounts for premiums to the insurer in amountsand at times determined by the agreement between them; or

      (c)   the creditor receives directly or indirectly under any policy ofinsurance a gain or advantage not prohibited by law.

      (3)   Except as provided in subsection (2), the creditor shall promptlymake or cause to be made an appropriate refund or credit to the consumerwith respect to any separate charge made to him for insurance if

      (a)   the insurance is not provided or is provided for a shorter term thanthat for which the charge to the consumer for insurance was computed; or

      (b)   the insurance terminates prior to the end of the term for which itwas written because of prepayment in full or otherwise.

      (4)   A refund or credit required by subsection (3) is appropriate as toamount if it is computed according to a method prescribed or approved bythe commissioner of insurance or a formula filed by the insurer with thecommissioner of insurance at least thirty (30) days before the consumer'sright to a refund or credit becomes determinable, unless the method orformula is employed after the commissioner of insurance notifies theinsurer that he disapproves it.

      History:   L. 1973, ch. 85, § 68; Jan. 1, 1974.