A. If a creditor makes available to the debtors more than one plan of creditinvoluntary unemployment insurance as defined in § 38.2-122.1, or more thanone plan of credit property insurance as defined in § 38.2-122.2, all debtorsmust be informed of all such plans for which they are eligible.
B. When elective credit property insurance or elective credit involuntaryunemployment insurance is offered, the borrower shall be given writtendisclosure that purchase of such insurance is not required and is not afactor in granting credit. The disclosure shall also include notice that theborrower has the right to use alternative coverage or to buy insuranceelsewhere.
C. If the debtor is given a contract which includes a single premium paymentto be charged for elective credit property insurance or elective creditinvoluntary unemployment insurance, the debtor shall be given:
1. A contract which does not include the elective insurance premiums; or
2. A disclosure form which shall clearly disclose the difference in premiumscharged for a contract with the elective insurance and one without theelective insurance. This disclosure shall include the difference between theamount financed, the monthly payment and the charge for insurance. The formshall be signed and dated by the debtor and the agent, if any, soliciting theapplication or the creditor's representative, if any, soliciting theenrollment request. A copy of this disclosure shall be given to the debtorand a copy shall be made a part of the creditor's loan file.
Nothing contained in this subsection shall be construed to prohibit thecreditor from combining such disclosure, in order to avoid redundancy, withother forms of disclosure required under state or federal law.
D. If a creditor offers credit property insurance and requires evidence ofinsurance coverage on personal household property used as security for anindebtedness or credit involuntary unemployment insurance is required assecurity for any indebtedness, the debtor shall have the option of (i)furnishing the required amount of insurance through existing policies ofinsurance owned or controlled by him or (ii) procuring and furnishing therequired coverage through any insurer authorized to transact insurance inthis Commonwealth. The creditor shall inform the debtor of this option inwriting and shall obtain the debtor's signature acknowledging that heunderstands this option. Nothing contained in this subsection shall beconstrued to prohibit the creditor from combining such disclosure, in orderto avoid redundancy, with other forms of disclosure required under state orfederal law.
E. No contract of insurance upon a debtor paid by a single premium shall bemade or effectuated unless, at the time of the contract, the debtor isprovided with a notice prominently disclosing the right to a refund ofpremium in the event the insurance is terminated prior to its scheduledmaturity date or the insured indebtedness is terminated or paid off early,and of the obligation of the debtor to provide notification to the insurerunder subsection G. This notice shall be signed and dated by the debtor andthe agent, if any, soliciting the application or the creditor'srepresentative, if any, soliciting the enrollment request. A copy of thesigned notice shall be given to the debtor and a copy shall be made part ofthe insurer's file.
F. The disclosure requirements set forth in subsections A, B, C, D, and Eshall be disclosed separately from the loan or credit transaction papers in aform or forms approved by the Commission. When credit property insurance orcredit involuntary unemployment insurance is offered with credit lifeinsurance or credit accident and sickness insurance, the disclosurerequirements set forth in subsections A, B, C, D, and E of § 38.2-233 and thedisclosure requirements set forth in subsections A, B, C, D, and E of §38.2-3735 may be disclosed together in a form which shall be approved by theCommission.
G. The Commission shall not approve any form providing credit propertyinsurance or credit involuntary unemployment insurance unless the policy orcertificate is written in nontechnical, readily understandable language,using words of common everyday usage. A form shall be deemed acceptable underthis section if the insurer certifies that the form achieves a FleschReadability Score of forty or more, using the Flesch Readability Formula asset forth in Rudolf Flesch, The Art of Readable Writing (1949, as revised1974), and certifies compliance with the guidelines set forth in this section.
The Commission shall not approve any form providing credit property or creditinvoluntary unemployment insurance paid by single premium unless the formincludes a provision, separately and prominently captioned, stating insubstance the following:
"REFUND OF PREMIUM IN THE EVENT OF EARLY TERMINATION"
"In the event this insurance policy or certificate is terminated prior toits originally scheduled maturity date, or the insured indebtedness isterminated or paid off earlier than scheduled, the insurer shall, within 30days of receipt of notification from the debtor of such termination or earlypayoff, refund or credit any amount paid by the debtor for the insurancebeyond the actual date of termination or payoff. Early termination of debtincludes termination by renewal or refinancing. The debtor's notification tothe insurer shall include proof of termination or early payoff of the insuredindebtedness."
The Commission shall not approve any form providing credit property or creditinvoluntary unemployment insurance unless the insurance policy or certificatestates that the unearned premium refund will be calculated on a pro ratabasis. No refund of five dollars or less need be made.
The Commission shall not approve any form providing credit property or creditinvoluntary unemployment insurance unless the form has printed on it a noticestating in substance that if, during a period of at least ten days from thedate the policy or certificate is delivered to the policy owner orcertificate holder the policy or certificate is surrendered to the insurer orits agent with a written request for cancellation, the policy or certificateshall be void from the beginning and the insurer shall refund any premiumpaid for the policy or certificate.
H. Premium calculations for credit property insurance involving closed endcredit transactions shall not be based on amounts paid for finance charges,service fees, delivery charges, taxes, interest, or any other item notcovered under the credit property insurance form. If the premium calculationsfor credit property insurance involving open end monthly outstanding balancecredit transactions are based on amounts paid for finance charges, servicefees, delivery charges, taxes, interest, meals, entertainment, or any otheritem not covered under the credit property insurance form, then at leasttwice per year the premium notice for such insurance shall be accompanied bya disclosure in no smaller than eight-point boldface type substantiallysimilar to the following:
Your credit property insurance premium is based on the entire outstandingbalance of this account. However, your insurance coverage applies only tocertain tangible personal property. Finance charges, service fees, deliverycharges, taxes, interest, meals, and entertainment are not covered under yourpolicy. Therefore, you may be paying premiums on items not covered under yourpolicy.
The disclosure described in this subsection, with the same type-sizerequirements, shall also be included in any written materials provided at thetime of invitation to contract and in policies or certificates provided toinsureds.
I. A credit property insurance or credit involuntary unemployment insurancepolicy or certificate which provides truncated or critical period coverage,or any other type of similar coverage that does not provide benefits orcoverage for the entire term or amount of the indebtedness, shall be subjectto the following requirements:
1. The policy or certificate shall include a statement printed on the face ofthe policy or first page of the certificate which clearly describes thelimited nature of the insurance. The statement shall be printed in capitalletters and in bold twelve-point or larger type; and
2. The policy or certificate shall not include any benefits or coverage otherthan truncated or critical period coverage or any other type of similarcoverage that does not provide benefits or coverage for the entire term oramount of the indebtedness.
J. A portion of the premium charged for credit property insurance or creditinvoluntary unemployment insurance may be allowed by the insurer to thecreditor for providing and furnishing such insurance, and no such allowanceshall be deemed a rebate of premium or as interest charges or considerationor an amount in excess of permitted charges in connection with the loan orother credit transaction.
K. All of the acts necessary to provide and service credit property insuranceand credit involuntary unemployment insurance may be performed within thesame place of business in which is transacted the business giving rise to theloan or other credit transaction.
L. Subsections A, B, C, D, F, and M shall not apply to credit propertyinsurance or credit involuntary unemployment insurance that will insure openend monthly outstanding balance credit transactions if the following criteriaare met:
1. The insurance is offered to the debtor after the loan or credittransaction it will insure has been approved by the creditor and has beeneffective at least seven days;
2. The solicitation for the insurance is by mail or telephone. The personmaking the solicitation shall not condition the future use or continuation ofthe open end credit upon the purchase of credit property insurance or creditinvoluntary unemployment insurance;
3. The creditor makes available only one plan of credit property insuranceand only one plan of credit involuntary unemployment insurance to the debtor;
4. The debtor is provided written confirmation of the insurance coveragewithin thirty days of the effective date of such coverage. The effective dateof such coverage shall begin on the date the solicitation is accepted; and
5. The individual policy or certificate has printed on it a notice statingthat if, during a period of at least thirty days from the date the policy orcertificate is delivered to the policy owner or certificate holder, thepolicy or certificate is surrendered to the insurer or its agent with awritten request for cancellation, the policy or certificate shall be voidfrom the beginning and the insurer shall refund any premium paid for thepolicy or certificate. This statement shall be prominently located on theface page of the policy or certificate, and shall be printed in capitalletters and in bold face twelve-point or larger type.
M. Subsections A, B, C, D, F, and L shall not apply to open end credittransactions by mail, telephone, or brochure solicitations that are notexcluded from the requirements of subsections A, B, C, D, and F by subsectionL where the insurer is offering only one plan of credit property insuranceand only one plan of credit involuntary unemployment insurance and thefollowing criteria are met:
1. The following disclosures shall be included in solicitations, whether aspart of the application or enrollment request or separately:
a. The name and address of the insurer(s) and creditor; and
b. A description of the coverage offered, including the amount of coverage,the premium rate for the insurance coverage offered, and a description of anyexceptions, limitations or restrictions applicable to such coverage.
2. The application or enrollment requests shall comply as follows:
a. Notwithstanding requirements set forth elsewhere, the application andenrollment request shall be printed in a type size of not less thaneight-point type, one-point leaded;
b. The application or enrollment request shall contain a prominent statementthat the insurance offered is optional, voluntary or not required;
c. The application or enrollment request shall contain no questions relatingto insurability other than the debtor's age or date of birth and, ifapplicable, active employment status; and
d. If the disclosures required by subdivision 1 of this subsection are notincluded in the application or enrollment request, the application andenrollment request shall make reference to such disclosures with sufficientinformation to assist the reader in locating such disclosures within separatesolicitation material.
3. Each insurer proposing to utilize an application or enrollment request insuch transactions shall file such form for approval by the Commission. If theinsurer anticipates utilizing such application or enrollment form in morethan one solicitation, the insurer shall submit, as part of its filing ofsuch form, a certification signed by an officer of the insurer, stating thatany such subsequent use of the application or enrollment form will utilizethe same form number and will not vary in substance from the wording andformat in which the form is submitted for approval. Upon approval of suchapplication or enrollment form by the Commission, the insurer shall bepermitted to utilize such form in various solicitation materials providedthat the application or enrollment form, when incorporated into suchsolicitation materials, has the same form number and wording substantiallyidentical to that contained on the approved application or enrollment form.When credit property insurance or credit involuntary unemployment insuranceis offered with credit life insurance or credit accident and sicknessinsurance, insurers may file one common form which shall be subject to priorapproval by the Commission and shall incorporate the requirements ofsubsection M of this section and subsection F of § 38.2-3737, according tothe requirements stated in this paragraph and in subdivision F 3 of §38.2-3737.
(1993, c. 774; 1994, c. 306; 1995, c. 167; 1999, c. 586; 2000, c. 526; 2009,c. 643.)
A. If a creditor makes available to the debtors more than one plan of creditinvoluntary unemployment insurance as defined in § 38.2-122.1, or more thanone plan of credit property insurance as defined in § 38.2-122.2, all debtorsmust be informed of all such plans for which they are eligible.
B. When elective credit property insurance or elective credit involuntaryunemployment insurance is offered, the borrower shall be given writtendisclosure that purchase of such insurance is not required and is not afactor in granting credit. The disclosure shall also include notice that theborrower has the right to use alternative coverage or to buy insuranceelsewhere.
C. If the debtor is given a contract which includes a single premium paymentto be charged for elective credit property insurance or elective creditinvoluntary unemployment insurance, the debtor shall be given:
1. A contract which does not include the elective insurance premiums; or
2. A disclosure form which shall clearly disclose the difference in premiumscharged for a contract with the elective insurance and one without theelective insurance. This disclosure shall include the difference between theamount financed, the monthly payment and the charge for insurance. The formshall be signed and dated by the debtor and the agent, if any, soliciting theapplication or the creditor's representative, if any, soliciting theenrollment request. A copy of this disclosure shall be given to the debtorand a copy shall be made a part of the creditor's loan file.
Nothing contained in this subsection shall be construed to prohibit thecreditor from combining such disclosure, in order to avoid redundancy, withother forms of disclosure required under state or federal law.
D. If a creditor offers credit property insurance and requires evidence ofinsurance coverage on personal household property used as security for anindebtedness or credit involuntary unemployment insurance is required assecurity for any indebtedness, the debtor shall have the option of (i)furnishing the required amount of insurance through existing policies ofinsurance owned or controlled by him or (ii) procuring and furnishing therequired coverage through any insurer authorized to transact insurance inthis Commonwealth. The creditor shall inform the debtor of this option inwriting and shall obtain the debtor's signature acknowledging that heunderstands this option. Nothing contained in this subsection shall beconstrued to prohibit the creditor from combining such disclosure, in orderto avoid redundancy, with other forms of disclosure required under state orfederal law.
E. No contract of insurance upon a debtor paid by a single premium shall bemade or effectuated unless, at the time of the contract, the debtor isprovided with a notice prominently disclosing the right to a refund ofpremium in the event the insurance is terminated prior to its scheduledmaturity date or the insured indebtedness is terminated or paid off early,and of the obligation of the debtor to provide notification to the insurerunder subsection G. This notice shall be signed and dated by the debtor andthe agent, if any, soliciting the application or the creditor'srepresentative, if any, soliciting the enrollment request. A copy of thesigned notice shall be given to the debtor and a copy shall be made part ofthe insurer's file.
F. The disclosure requirements set forth in subsections A, B, C, D, and Eshall be disclosed separately from the loan or credit transaction papers in aform or forms approved by the Commission. When credit property insurance orcredit involuntary unemployment insurance is offered with credit lifeinsurance or credit accident and sickness insurance, the disclosurerequirements set forth in subsections A, B, C, D, and E of § 38.2-233 and thedisclosure requirements set forth in subsections A, B, C, D, and E of §38.2-3735 may be disclosed together in a form which shall be approved by theCommission.
G. The Commission shall not approve any form providing credit propertyinsurance or credit involuntary unemployment insurance unless the policy orcertificate is written in nontechnical, readily understandable language,using words of common everyday usage. A form shall be deemed acceptable underthis section if the insurer certifies that the form achieves a FleschReadability Score of forty or more, using the Flesch Readability Formula asset forth in Rudolf Flesch, The Art of Readable Writing (1949, as revised1974), and certifies compliance with the guidelines set forth in this section.
The Commission shall not approve any form providing credit property or creditinvoluntary unemployment insurance paid by single premium unless the formincludes a provision, separately and prominently captioned, stating insubstance the following:
"REFUND OF PREMIUM IN THE EVENT OF EARLY TERMINATION"
"In the event this insurance policy or certificate is terminated prior toits originally scheduled maturity date, or the insured indebtedness isterminated or paid off earlier than scheduled, the insurer shall, within 30days of receipt of notification from the debtor of such termination or earlypayoff, refund or credit any amount paid by the debtor for the insurancebeyond the actual date of termination or payoff. Early termination of debtincludes termination by renewal or refinancing. The debtor's notification tothe insurer shall include proof of termination or early payoff of the insuredindebtedness."
The Commission shall not approve any form providing credit property or creditinvoluntary unemployment insurance unless the insurance policy or certificatestates that the unearned premium refund will be calculated on a pro ratabasis. No refund of five dollars or less need be made.
The Commission shall not approve any form providing credit property or creditinvoluntary unemployment insurance unless the form has printed on it a noticestating in substance that if, during a period of at least ten days from thedate the policy or certificate is delivered to the policy owner orcertificate holder the policy or certificate is surrendered to the insurer orits agent with a written request for cancellation, the policy or certificateshall be void from the beginning and the insurer shall refund any premiumpaid for the policy or certificate.
H. Premium calculations for credit property insurance involving closed endcredit transactions shall not be based on amounts paid for finance charges,service fees, delivery charges, taxes, interest, or any other item notcovered under the credit property insurance form. If the premium calculationsfor credit property insurance involving open end monthly outstanding balancecredit transactions are based on amounts paid for finance charges, servicefees, delivery charges, taxes, interest, meals, entertainment, or any otheritem not covered under the credit property insurance form, then at leasttwice per year the premium notice for such insurance shall be accompanied bya disclosure in no smaller than eight-point boldface type substantiallysimilar to the following:
Your credit property insurance premium is based on the entire outstandingbalance of this account. However, your insurance coverage applies only tocertain tangible personal property. Finance charges, service fees, deliverycharges, taxes, interest, meals, and entertainment are not covered under yourpolicy. Therefore, you may be paying premiums on items not covered under yourpolicy.
The disclosure described in this subsection, with the same type-sizerequirements, shall also be included in any written materials provided at thetime of invitation to contract and in policies or certificates provided toinsureds.
I. A credit property insurance or credit involuntary unemployment insurancepolicy or certificate which provides truncated or critical period coverage,or any other type of similar coverage that does not provide benefits orcoverage for the entire term or amount of the indebtedness, shall be subjectto the following requirements:
1. The policy or certificate shall include a statement printed on the face ofthe policy or first page of the certificate which clearly describes thelimited nature of the insurance. The statement shall be printed in capitalletters and in bold twelve-point or larger type; and
2. The policy or certificate shall not include any benefits or coverage otherthan truncated or critical period coverage or any other type of similarcoverage that does not provide benefits or coverage for the entire term oramount of the indebtedness.
J. A portion of the premium charged for credit property insurance or creditinvoluntary unemployment insurance may be allowed by the insurer to thecreditor for providing and furnishing such insurance, and no such allowanceshall be deemed a rebate of premium or as interest charges or considerationor an amount in excess of permitted charges in connection with the loan orother credit transaction.
K. All of the acts necessary to provide and service credit property insuranceand credit involuntary unemployment insurance may be performed within thesame place of business in which is transacted the business giving rise to theloan or other credit transaction.
L. Subsections A, B, C, D, F, and M shall not apply to credit propertyinsurance or credit involuntary unemployment insurance that will insure openend monthly outstanding balance credit transactions if the following criteriaare met:
1. The insurance is offered to the debtor after the loan or credittransaction it will insure has been approved by the creditor and has beeneffective at least seven days;
2. The solicitation for the insurance is by mail or telephone. The personmaking the solicitation shall not condition the future use or continuation ofthe open end credit upon the purchase of credit property insurance or creditinvoluntary unemployment insurance;
3. The creditor makes available only one plan of credit property insuranceand only one plan of credit involuntary unemployment insurance to the debtor;
4. The debtor is provided written confirmation of the insurance coveragewithin thirty days of the effective date of such coverage. The effective dateof such coverage shall begin on the date the solicitation is accepted; and
5. The individual policy or certificate has printed on it a notice statingthat if, during a period of at least thirty days from the date the policy orcertificate is delivered to the policy owner or certificate holder, thepolicy or certificate is surrendered to the insurer or its agent with awritten request for cancellation, the policy or certificate shall be voidfrom the beginning and the insurer shall refund any premium paid for thepolicy or certificate. This statement shall be prominently located on theface page of the policy or certificate, and shall be printed in capitalletters and in bold face twelve-point or larger type.
M. Subsections A, B, C, D, F, and L shall not apply to open end credittransactions by mail, telephone, or brochure solicitations that are notexcluded from the requirements of subsections A, B, C, D, and F by subsectionL where the insurer is offering only one plan of credit property insuranceand only one plan of credit involuntary unemployment insurance and thefollowing criteria are met:
1. The following disclosures shall be included in solicitations, whether aspart of the application or enrollment request or separately:
a. The name and address of the insurer(s) and creditor; and
b. A description of the coverage offered, including the amount of coverage,the premium rate for the insurance coverage offered, and a description of anyexceptions, limitations or restrictions applicable to such coverage.
2. The application or enrollment requests shall comply as follows:
a. Notwithstanding requirements set forth elsewhere, the application andenrollment request shall be printed in a type size of not less thaneight-point type, one-point leaded;
b. The application or enrollment request shall contain a prominent statementthat the insurance offered is optional, voluntary or not required;
c. The application or enrollment request shall contain no questions relatingto insurability other than the debtor's age or date of birth and, ifapplicable, active employment status; and
d. If the disclosures required by subdivision 1 of this subsection are notincluded in the application or enrollment request, the application andenrollment request shall make reference to such disclosures with sufficientinformation to assist the reader in locating such disclosures within separatesolicitation material.
3. Each insurer proposing to utilize an application or enrollment request insuch transactions shall file such form for approval by the Commission. If theinsurer anticipates utilizing such application or enrollment form in morethan one solicitation, the insurer shall submit, as part of its filing ofsuch form, a certification signed by an officer of the insurer, stating thatany such subsequent use of the application or enrollment form will utilizethe same form number and will not vary in substance from the wording andformat in which the form is submitted for approval. Upon approval of suchapplication or enrollment form by the Commission, the insurer shall bepermitted to utilize such form in various solicitation materials providedthat the application or enrollment form, when incorporated into suchsolicitation materials, has the same form number and wording substantiallyidentical to that contained on the approved application or enrollment form.When credit property insurance or credit involuntary unemployment insuranceis offered with credit life insurance or credit accident and sicknessinsurance, insurers may file one common form which shall be subject to priorapproval by the Commission and shall incorporate the requirements ofsubsection M of this section and subsection F of § 38.2-3737, according tothe requirements stated in this paragraph and in subdivision F 3 of §38.2-3737.
(1993, c. 774; 1994, c. 306; 1995, c. 167; 1999, c. 586; 2000, c. 526; 2009,c. 643.)
A. If a creditor makes available to the debtors more than one plan of creditinvoluntary unemployment insurance as defined in § 38.2-122.1, or more thanone plan of credit property insurance as defined in § 38.2-122.2, all debtorsmust be informed of all such plans for which they are eligible.
B. When elective credit property insurance or elective credit involuntaryunemployment insurance is offered, the borrower shall be given writtendisclosure that purchase of such insurance is not required and is not afactor in granting credit. The disclosure shall also include notice that theborrower has the right to use alternative coverage or to buy insuranceelsewhere.
C. If the debtor is given a contract which includes a single premium paymentto be charged for elective credit property insurance or elective creditinvoluntary unemployment insurance, the debtor shall be given:
1. A contract which does not include the elective insurance premiums; or
2. A disclosure form which shall clearly disclose the difference in premiumscharged for a contract with the elective insurance and one without theelective insurance. This disclosure shall include the difference between theamount financed, the monthly payment and the charge for insurance. The formshall be signed and dated by the debtor and the agent, if any, soliciting theapplication or the creditor's representative, if any, soliciting theenrollment request. A copy of this disclosure shall be given to the debtorand a copy shall be made a part of the creditor's loan file.
Nothing contained in this subsection shall be construed to prohibit thecreditor from combining such disclosure, in order to avoid redundancy, withother forms of disclosure required under state or federal law.
D. If a creditor offers credit property insurance and requires evidence ofinsurance coverage on personal household property used as security for anindebtedness or credit involuntary unemployment insurance is required assecurity for any indebtedness, the debtor shall have the option of (i)furnishing the required amount of insurance through existing policies ofinsurance owned or controlled by him or (ii) procuring and furnishing therequired coverage through any insurer authorized to transact insurance inthis Commonwealth. The creditor shall inform the debtor of this option inwriting and shall obtain the debtor's signature acknowledging that heunderstands this option. Nothing contained in this subsection shall beconstrued to prohibit the creditor from combining such disclosure, in orderto avoid redundancy, with other forms of disclosure required under state orfederal law.
E. No contract of insurance upon a debtor paid by a single premium shall bemade or effectuated unless, at the time of the contract, the debtor isprovided with a notice prominently disclosing the right to a refund ofpremium in the event the insurance is terminated prior to its scheduledmaturity date or the insured indebtedness is terminated or paid off early,and of the obligation of the debtor to provide notification to the insurerunder subsection G. This notice shall be signed and dated by the debtor andthe agent, if any, soliciting the application or the creditor'srepresentative, if any, soliciting the enrollment request. A copy of thesigned notice shall be given to the debtor and a copy shall be made part ofthe insurer's file.
F. The disclosure requirements set forth in subsections A, B, C, D, and Eshall be disclosed separately from the loan or credit transaction papers in aform or forms approved by the Commission. When credit property insurance orcredit involuntary unemployment insurance is offered with credit lifeinsurance or credit accident and sickness insurance, the disclosurerequirements set forth in subsections A, B, C, D, and E of § 38.2-233 and thedisclosure requirements set forth in subsections A, B, C, D, and E of §38.2-3735 may be disclosed together in a form which shall be approved by theCommission.
G. The Commission shall not approve any form providing credit propertyinsurance or credit involuntary unemployment insurance unless the policy orcertificate is written in nontechnical, readily understandable language,using words of common everyday usage. A form shall be deemed acceptable underthis section if the insurer certifies that the form achieves a FleschReadability Score of forty or more, using the Flesch Readability Formula asset forth in Rudolf Flesch, The Art of Readable Writing (1949, as revised1974), and certifies compliance with the guidelines set forth in this section.
The Commission shall not approve any form providing credit property or creditinvoluntary unemployment insurance paid by single premium unless the formincludes a provision, separately and prominently captioned, stating insubstance the following:
"REFUND OF PREMIUM IN THE EVENT OF EARLY TERMINATION"
"In the event this insurance policy or certificate is terminated prior toits originally scheduled maturity date, or the insured indebtedness isterminated or paid off earlier than scheduled, the insurer shall, within 30days of receipt of notification from the debtor of such termination or earlypayoff, refund or credit any amount paid by the debtor for the insurancebeyond the actual date of termination or payoff. Early termination of debtincludes termination by renewal or refinancing. The debtor's notification tothe insurer shall include proof of termination or early payoff of the insuredindebtedness."
The Commission shall not approve any form providing credit property or creditinvoluntary unemployment insurance unless the insurance policy or certificatestates that the unearned premium refund will be calculated on a pro ratabasis. No refund of five dollars or less need be made.
The Commission shall not approve any form providing credit property or creditinvoluntary unemployment insurance unless the form has printed on it a noticestating in substance that if, during a period of at least ten days from thedate the policy or certificate is delivered to the policy owner orcertificate holder the policy or certificate is surrendered to the insurer orits agent with a written request for cancellation, the policy or certificateshall be void from the beginning and the insurer shall refund any premiumpaid for the policy or certificate.
H. Premium calculations for credit property insurance involving closed endcredit transactions shall not be based on amounts paid for finance charges,service fees, delivery charges, taxes, interest, or any other item notcovered under the credit property insurance form. If the premium calculationsfor credit property insurance involving open end monthly outstanding balancecredit transactions are based on amounts paid for finance charges, servicefees, delivery charges, taxes, interest, meals, entertainment, or any otheritem not covered under the credit property insurance form, then at leasttwice per year the premium notice for such insurance shall be accompanied bya disclosure in no smaller than eight-point boldface type substantiallysimilar to the following:
Your credit property insurance premium is based on the entire outstandingbalance of this account. However, your insurance coverage applies only tocertain tangible personal property. Finance charges, service fees, deliverycharges, taxes, interest, meals, and entertainment are not covered under yourpolicy. Therefore, you may be paying premiums on items not covered under yourpolicy.
The disclosure described in this subsection, with the same type-sizerequirements, shall also be included in any written materials provided at thetime of invitation to contract and in policies or certificates provided toinsureds.
I. A credit property insurance or credit involuntary unemployment insurancepolicy or certificate which provides truncated or critical period coverage,or any other type of similar coverage that does not provide benefits orcoverage for the entire term or amount of the indebtedness, shall be subjectto the following requirements:
1. The policy or certificate shall include a statement printed on the face ofthe policy or first page of the certificate which clearly describes thelimited nature of the insurance. The statement shall be printed in capitalletters and in bold twelve-point or larger type; and
2. The policy or certificate shall not include any benefits or coverage otherthan truncated or critical period coverage or any other type of similarcoverage that does not provide benefits or coverage for the entire term oramount of the indebtedness.
J. A portion of the premium charged for credit property insurance or creditinvoluntary unemployment insurance may be allowed by the insurer to thecreditor for providing and furnishing such insurance, and no such allowanceshall be deemed a rebate of premium or as interest charges or considerationor an amount in excess of permitted charges in connection with the loan orother credit transaction.
K. All of the acts necessary to provide and service credit property insuranceand credit involuntary unemployment insurance may be performed within thesame place of business in which is transacted the business giving rise to theloan or other credit transaction.
L. Subsections A, B, C, D, F, and M shall not apply to credit propertyinsurance or credit involuntary unemployment insurance that will insure openend monthly outstanding balance credit transactions if the following criteriaare met:
1. The insurance is offered to the debtor after the loan or credittransaction it will insure has been approved by the creditor and has beeneffective at least seven days;
2. The solicitation for the insurance is by mail or telephone. The personmaking the solicitation shall not condition the future use or continuation ofthe open end credit upon the purchase of credit property insurance or creditinvoluntary unemployment insurance;
3. The creditor makes available only one plan of credit property insuranceand only one plan of credit involuntary unemployment insurance to the debtor;
4. The debtor is provided written confirmation of the insurance coveragewithin thirty days of the effective date of such coverage. The effective dateof such coverage shall begin on the date the solicitation is accepted; and
5. The individual policy or certificate has printed on it a notice statingthat if, during a period of at least thirty days from the date the policy orcertificate is delivered to the policy owner or certificate holder, thepolicy or certificate is surrendered to the insurer or its agent with awritten request for cancellation, the policy or certificate shall be voidfrom the beginning and the insurer shall refund any premium paid for thepolicy or certificate. This statement shall be prominently located on theface page of the policy or certificate, and shall be printed in capitalletters and in bold face twelve-point or larger type.
M. Subsections A, B, C, D, F, and L shall not apply to open end credittransactions by mail, telephone, or brochure solicitations that are notexcluded from the requirements of subsections A, B, C, D, and F by subsectionL where the insurer is offering only one plan of credit property insuranceand only one plan of credit involuntary unemployment insurance and thefollowing criteria are met:
1. The following disclosures shall be included in solicitations, whether aspart of the application or enrollment request or separately:
a. The name and address of the insurer(s) and creditor; and
b. A description of the coverage offered, including the amount of coverage,the premium rate for the insurance coverage offered, and a description of anyexceptions, limitations or restrictions applicable to such coverage.
2. The application or enrollment requests shall comply as follows:
a. Notwithstanding requirements set forth elsewhere, the application andenrollment request shall be printed in a type size of not less thaneight-point type, one-point leaded;
b. The application or enrollment request shall contain a prominent statementthat the insurance offered is optional, voluntary or not required;
c. The application or enrollment request shall contain no questions relatingto insurability other than the debtor's age or date of birth and, ifapplicable, active employment status; and
d. If the disclosures required by subdivision 1 of this subsection are notincluded in the application or enrollment request, the application andenrollment request shall make reference to such disclosures with sufficientinformation to assist the reader in locating such disclosures within separatesolicitation material.
3. Each insurer proposing to utilize an application or enrollment request insuch transactions shall file such form for approval by the Commission. If theinsurer anticipates utilizing such application or enrollment form in morethan one solicitation, the insurer shall submit, as part of its filing ofsuch form, a certification signed by an officer of the insurer, stating thatany such subsequent use of the application or enrollment form will utilizethe same form number and will not vary in substance from the wording andformat in which the form is submitted for approval. Upon approval of suchapplication or enrollment form by the Commission, the insurer shall bepermitted to utilize such form in various solicitation materials providedthat the application or enrollment form, when incorporated into suchsolicitation materials, has the same form number and wording substantiallyidentical to that contained on the approved application or enrollment form.When credit property insurance or credit involuntary unemployment insuranceis offered with credit life insurance or credit accident and sicknessinsurance, insurers may file one common form which shall be subject to priorapproval by the Commission and shall incorporate the requirements ofsubsection M of this section and subsection F of § 38.2-3737, according tothe requirements stated in this paragraph and in subdivision F 3 of §38.2-3737.
(1993, c. 774; 1994, c. 306; 1995, c. 167; 1999, c. 586; 2000, c. 526; 2009,c. 643.)
