A. Each individual policy or group certificate shall provide that, in theevent of termination of the insurance prior to the scheduled maturity date ofthe indebtedness, any refund of an amount paid by the debtor for insuranceshall be paid or credited promptly to the debtor or person entitled thereto.
B. If a creditor requires a debtor to make any payment for credit lifeinsurance or credit accident and sickness insurance and an individual policyor group certificate of insurance is not issued, the creditor shallimmediately give written notice to such debtor and shall promptly make anappropriate credit to the account.
C. Refund formulas which any insurer desires to use for decreasing termcredit life insurance with terms of more than sixty-one months must developrefunds which are at least as favorable to the debtor as refunds based on theactuarial method. Refund formulas for decreasing term credit life insurancewith terms of sixty-one months or less must develop refunds which are atleast as favorable to the debtor as refunds based on the Rule of 78 or theactuarial method, whichever method is consistent with the original method ofpremium calculation. Refund formulas for credit accident and sicknessinsurance shall develop refunds that are at least as favorable to the debtoras refunds based on the actuarial method. The actuarial method will result inrefunds equal to the premium cost of scheduled benefits subsequent to thedate of cancellation or termination, computed at the schedule of premiumrates in effect on the date of issue. The refund of premiums for level termcredit life insurance shall be no less than the pro rata unearned grosspremium. Refund formulas must be filed with and approved by the Commissionprior to use.
D. The requirements of subsection C of this section that refund formulas befiled with the Commission shall be considered fulfilled if the refundformulas are set forth in the individual policy or group certificate filedwith the Commission.
E. Refunds may be computed:
1. On a daily basis; or
2. From the end of the loan month if sixteen days or more of a loan monthhave been earned, provided that, if fifteen days or less of a loan month havebeen earned, the refund is computed from the beginning of the loan month.
F. No refund of five dollars or less need be made.
G. Voluntary prepayment of indebtedness. If a debtor prepays the indebtednessother than as a result of death:
1. Any credit life insurance covering such indebtedness shall be terminatedand an appropriate refund of the credit life insurance premium shall be paidor credited to the person entitled to the refund in accordance with thissection; and
2. Any credit accident and sickness insurance covering such indebtednessshall be terminated and an appropriate refund of the credit accident andsickness insurance premium shall be paid or credited to the person entitledto the refund in accordance with this section. If a claim under such coverageis in progress at the time of prepayment, the amount of refund may bedetermined as if the prepayment did not occur until the payment of benefitsterminates. No refund need be paid during any period of disability for whichcredit accident and sickness benefits are payable. A refund shall be computedas if prepayment occurred at the end of the disability period.
H. Involuntary prepayment of indebtedness. If an indebtedness is prepaid bythe proceeds of a credit life insurance policy covering the debtor, then itshall be the responsibility of the insurer to see that the following are paidto the insured debtor, if living, or the beneficiary, other than thecreditor, named by the debtor or to the debtor's estate:
1. An appropriate refund of the credit accident and sickness insurancepremium in accordance with this section; and
2. The amount of benefits in excess of the amount required to repay theindebtedness after crediting any unearned interest or finance charges.
(1960, c. 67, § 38.1-482.8; 1982, c. 223, § 38.2-3711; 1986, c. 562; 1992, c.586; 2002, c. 72; 2009, c. 643.)
A. Each individual policy or group certificate shall provide that, in theevent of termination of the insurance prior to the scheduled maturity date ofthe indebtedness, any refund of an amount paid by the debtor for insuranceshall be paid or credited promptly to the debtor or person entitled thereto.
B. If a creditor requires a debtor to make any payment for credit lifeinsurance or credit accident and sickness insurance and an individual policyor group certificate of insurance is not issued, the creditor shallimmediately give written notice to such debtor and shall promptly make anappropriate credit to the account.
C. Refund formulas which any insurer desires to use for decreasing termcredit life insurance with terms of more than sixty-one months must developrefunds which are at least as favorable to the debtor as refunds based on theactuarial method. Refund formulas for decreasing term credit life insurancewith terms of sixty-one months or less must develop refunds which are atleast as favorable to the debtor as refunds based on the Rule of 78 or theactuarial method, whichever method is consistent with the original method ofpremium calculation. Refund formulas for credit accident and sicknessinsurance shall develop refunds that are at least as favorable to the debtoras refunds based on the actuarial method. The actuarial method will result inrefunds equal to the premium cost of scheduled benefits subsequent to thedate of cancellation or termination, computed at the schedule of premiumrates in effect on the date of issue. The refund of premiums for level termcredit life insurance shall be no less than the pro rata unearned grosspremium. Refund formulas must be filed with and approved by the Commissionprior to use.
D. The requirements of subsection C of this section that refund formulas befiled with the Commission shall be considered fulfilled if the refundformulas are set forth in the individual policy or group certificate filedwith the Commission.
E. Refunds may be computed:
1. On a daily basis; or
2. From the end of the loan month if sixteen days or more of a loan monthhave been earned, provided that, if fifteen days or less of a loan month havebeen earned, the refund is computed from the beginning of the loan month.
F. No refund of five dollars or less need be made.
G. Voluntary prepayment of indebtedness. If a debtor prepays the indebtednessother than as a result of death:
1. Any credit life insurance covering such indebtedness shall be terminatedand an appropriate refund of the credit life insurance premium shall be paidor credited to the person entitled to the refund in accordance with thissection; and
2. Any credit accident and sickness insurance covering such indebtednessshall be terminated and an appropriate refund of the credit accident andsickness insurance premium shall be paid or credited to the person entitledto the refund in accordance with this section. If a claim under such coverageis in progress at the time of prepayment, the amount of refund may bedetermined as if the prepayment did not occur until the payment of benefitsterminates. No refund need be paid during any period of disability for whichcredit accident and sickness benefits are payable. A refund shall be computedas if prepayment occurred at the end of the disability period.
H. Involuntary prepayment of indebtedness. If an indebtedness is prepaid bythe proceeds of a credit life insurance policy covering the debtor, then itshall be the responsibility of the insurer to see that the following are paidto the insured debtor, if living, or the beneficiary, other than thecreditor, named by the debtor or to the debtor's estate:
1. An appropriate refund of the credit accident and sickness insurancepremium in accordance with this section; and
2. The amount of benefits in excess of the amount required to repay theindebtedness after crediting any unearned interest or finance charges.
(1960, c. 67, § 38.1-482.8; 1982, c. 223, § 38.2-3711; 1986, c. 562; 1992, c.586; 2002, c. 72; 2009, c. 643.)
A. Each individual policy or group certificate shall provide that, in theevent of termination of the insurance prior to the scheduled maturity date ofthe indebtedness, any refund of an amount paid by the debtor for insuranceshall be paid or credited promptly to the debtor or person entitled thereto.
B. If a creditor requires a debtor to make any payment for credit lifeinsurance or credit accident and sickness insurance and an individual policyor group certificate of insurance is not issued, the creditor shallimmediately give written notice to such debtor and shall promptly make anappropriate credit to the account.
C. Refund formulas which any insurer desires to use for decreasing termcredit life insurance with terms of more than sixty-one months must developrefunds which are at least as favorable to the debtor as refunds based on theactuarial method. Refund formulas for decreasing term credit life insurancewith terms of sixty-one months or less must develop refunds which are atleast as favorable to the debtor as refunds based on the Rule of 78 or theactuarial method, whichever method is consistent with the original method ofpremium calculation. Refund formulas for credit accident and sicknessinsurance shall develop refunds that are at least as favorable to the debtoras refunds based on the actuarial method. The actuarial method will result inrefunds equal to the premium cost of scheduled benefits subsequent to thedate of cancellation or termination, computed at the schedule of premiumrates in effect on the date of issue. The refund of premiums for level termcredit life insurance shall be no less than the pro rata unearned grosspremium. Refund formulas must be filed with and approved by the Commissionprior to use.
D. The requirements of subsection C of this section that refund formulas befiled with the Commission shall be considered fulfilled if the refundformulas are set forth in the individual policy or group certificate filedwith the Commission.
E. Refunds may be computed:
1. On a daily basis; or
2. From the end of the loan month if sixteen days or more of a loan monthhave been earned, provided that, if fifteen days or less of a loan month havebeen earned, the refund is computed from the beginning of the loan month.
F. No refund of five dollars or less need be made.
G. Voluntary prepayment of indebtedness. If a debtor prepays the indebtednessother than as a result of death:
1. Any credit life insurance covering such indebtedness shall be terminatedand an appropriate refund of the credit life insurance premium shall be paidor credited to the person entitled to the refund in accordance with thissection; and
2. Any credit accident and sickness insurance covering such indebtednessshall be terminated and an appropriate refund of the credit accident andsickness insurance premium shall be paid or credited to the person entitledto the refund in accordance with this section. If a claim under such coverageis in progress at the time of prepayment, the amount of refund may bedetermined as if the prepayment did not occur until the payment of benefitsterminates. No refund need be paid during any period of disability for whichcredit accident and sickness benefits are payable. A refund shall be computedas if prepayment occurred at the end of the disability period.
H. Involuntary prepayment of indebtedness. If an indebtedness is prepaid bythe proceeds of a credit life insurance policy covering the debtor, then itshall be the responsibility of the insurer to see that the following are paidto the insured debtor, if living, or the beneficiary, other than thecreditor, named by the debtor or to the debtor's estate:
1. An appropriate refund of the credit accident and sickness insurancepremium in accordance with this section; and
2. The amount of benefits in excess of the amount required to repay theindebtedness after crediting any unearned interest or finance charges.
(1960, c. 67, § 38.1-482.8; 1982, c. 223, § 38.2-3711; 1986, c. 562; 1992, c.586; 2002, c. 72; 2009, c. 643.)
