State Codes and Statutes

Statutes > Wyoming > Title26 > Chapter21

CHAPTER 21 - CREDIT LIFE AND DISABILITY INSURANCE

 

26-21-101. Scope and applicability of chapter.

 

 

(a) All life insurance and all disability insurance inconnection with loans or other credit transactions is subject to this chapter,except that insurance is not subject to this chapter if:

 

(i) It is in connection with a loan or other credit transactionof more than ten (10) years; or

 

(ii) The issuance of that insurance is an isolated transactionby the insurer not related to an agreement or a plan or regular course ofconduct for insuring debtors of the creditor.

 

26-21-102. Definitions.

 

 

(a) For the purpose of this chapter:

 

(i) "Credit life insurance" means insurance on thelife of a debtor pursuant to or in connection with a specific loan or othercredit transaction;

 

(ii) "Credit disability insurance" means insurance ona debtor to provide indemnity for payments becoming due on a specific loan orother credit transaction while the debtor is disabled as defined in the policy;

 

(iii) "Creditor" means the lender of money or vendor ofgoods, services or property, including a lessor under a lease intended as asecurity, rights or privileges, for which payment is arranged through a credittransaction, or any successor to the right, title or interest of any suchlender or vendor, and an affiliate, associate or subsidiary of any of them orany director, officer or employee of any of them or any other person in any wayassociated with any of them;

 

(iv) "Debtor" means a borrower of money or a purchaseror lessee of goods, services, property, rights or privileges for which paymentis arranged through a credit transaction;

 

(v) "Indebtedness" means the total amount payable bya debtor to a creditor in connection with a loan or other credit transaction.

 

26-21-103. Forms of credit life and credit disability insurance.

 

 

(a) Credit life insurance and credit disability insurance shallbe issued only in the following forms:

 

(i) Individual policies of life insurance issued to debtors onthe term plan;

 

(ii) Individual policies of disability insurance issued todebtors on a term plan, or disability benefit provisions in individual policiesof credit life insurance;

 

(iii) Group policies of life insurance issued to creditorsproviding insurance upon the lives of debtors on the term plan;

 

(iv) Group policies of disability insurance issued to creditorson a term plan insuring debtors, or disability benefit provisions in groupcredit life insurance policies to provide disability coverage.

 

26-21-104. Amount of credit life insurance.

 

 

(a) The initial amount of credit life insurance shall notexceed the total amount repayable under the contract of indebtedness.

 

(b) If an indebtedness is repayable in substantially equalinstallments, the amount of insurance shall not exceed the scheduled or actualamount of unpaid indebtedness, whichever is greater.

 

(c) Notwithstanding subsections (a) and (b) of this section,insurance on agricultural credit transactions not exceeding two (2) years induration may be written up to the amount of the loan commitment on anondecreasing or level term plan.

 

(d) Notwithstanding any other provision of law, insurance oneducational credit transaction commitments may be written for the amount of theportion of that commitment that the creditor has not advanced.

 

26-21-105. Credit disability insurance.

 

Thetotal amount of indemnity payable by credit disability insurance in case ofdisability, as defined in the policy, shall not exceed the aggregate of theperiodic scheduled unpaid installments of the indebtedness, and the amount ofeach periodic indemnity payment shall not exceed the original indebtednessdivided by the number of periodic installments.

 

26-21-106. Term of insurance.

 

 

(a) The term of any credit life insurance or credit disabilityinsurance, subject to the insurer's acceptance, commences on the date when thedebtor becomes obligated to the creditor, or the date when the debtor appliesfor the insurance, whichever is later, except that if a group policy providescoverage with respect to the existing obligations, the insurance on a debtorwith respect to the indebtedness commences on the effective date of the policy.

 

(b) If evidence of insurability is required and that evidenceis furnished more than thirty (30) days after the date when the debtor becomesobligated to the creditor, the term of the insurance may commence on the dateon which the insurer determines the evidence to be satisfactory, and in thatcase there shall be an appropriate refund or adjustment of any charge to thedebtor for insurance. The term of the insurance shall not extend more thanfifteen (15) days beyond the scheduled maturity date of the indebtedness exceptwhen extended without additional cost to the debtor.

 

(c) If the indebtedness is discharged because of renewal orrefinancing prior to the scheduled maturity date, the insurance in force shallbe terminated before any new insurance may be issued in connection with therenewed or refinanced indebtedness.

 

(d) In all cases of termination prior to scheduled maturity, arefund shall be paid or credited as provided in W.S. 26-21-109.

 

26-21-107. Provisions of policies and certificates; disclosure todebtors.

 

 

(a) All credit life insurance and credit disability insuranceshall be evidenced by an individual policy, or in the case of group insuranceby a certificate of insurance, which individual policy or group certificateshall be delivered to the debtor.

 

(b) Each individual policy or group certificate of credit lifeinsurance or credit disability insurance, or both, in addition to otherrequirements of law, shall:

 

(i) Set forth:

 

(A) The insurer's name and home office address;

 

(B) The identity by name or otherwise of the persons insured;

 

(C) The premium amount of payment, if any, by the debtorseparately for credit life insurance and credit disability insurance;

 

(D) A description of the amount, term and coverage includingany exceptions, limitations and restrictions; and

 

(ii) State that the benefits shall be paid to the creditor toreduce or extinguish the unpaid indebtedness and, if the amount of insuranceexceeds the unpaid indebtedness, the excess is payable to a beneficiary, otherthan the creditor, named by the debtor or to his estate.

 

(c) Except as otherwise provided in this section, theindividual policy or group certificate of insurance shall be delivered to theinsured debtor at the time the indebtedness is incurred.

 

(d) If a debtor makes a separate payment for credit life orcredit disability insurance and an individual policy or group certificate ofinsurance is not delivered to the debtor at the time the indebtedness isincurred, a copy of the application for the policy or a notice of proposed insuranceshall be delivered at that time to the debtor. The copy of the application for,or notice of proposed insurance, shall:

 

(i) Be signed by the debtor and shall set forth:

 

(A) The identity by name or otherwise of the person or personsinsured;

 

(B) The premium or amount of payment by the debtor, if any,separately for credit life insurance and credit disability insurance; and

 

(C) A statement that within thirty (30) days, if the insureraccepts the insurance, there shall be delivered to the debtor an individualpolicy or group certificate of insurance containing:

 

(I) The insurer's name and home office address;

 

(II) A description of the amount, term and coverage includingany exceptions, limitations and restrictions.

 

(ii) Refer exclusively to insurance coverage and shall beseparate from the loan, sale or other credit statement of account, instrumentor agreement, unless the information required by this subsection is prominentlyset forth in the copy of the application or the notice of proposed insurance.

 

(e) Upon the insurer's acceptance of the insurance and withinthirty (30) days from the date the indebtedness is incurred, the insurer shallcause the individual policy or group certificate of insurance to be deliveredto the debtor. The application or notice of proposed insurance shall state thatupon the insurer's acceptance, the insurance is effective as provided in W.S.26-21-106.

 

(f) If the named insurer does not accept the risk, the debtorshall receive a policy or certificate of insurance setting forth the name andhome office address of the substituted insurer and the amount of the premium tobe charged. If the amount of premium is less than that set forth in the noticeof proposed insurance, an appropriate refund shall be made.

 

26-21-108. Filing of policies with commissioner; approval ordisapproval; withdrawal of approval.

 

 

(a) All policies, certificates of insurance, notices ofproposed insurance, applications for insurance, endorsements and ridersdelivered or issued for delivery in this state and the schedule of premiumrates pertaining thereto shall be filed with the commissioner.

 

(b) The commissioner, within thirty (30) days after the filingof any such policies, certificates of insurance, notices of proposed insurance,applications for insurance, endorsements and riders, shall disapprove any suchform if the premium rates charged or to be charged are excessive in relation tobenefits, or if it contains provisions which are unjust, unfair, inequitable,misleading, deceptive or encourage misrepresentation of the coverage, or arecontrary to any provision of this code or of any rule or regulation promulgatedunder this code. In determining whether to disapprove any form the commissionershall consider past and prospective loss experience within and outside thisstate, underwriting practice and judgment to the extent appropriate and anyother relevant factors within and outside this state.

 

(c) If the commissioner notifies the insurer that the form isdisapproved, it is unlawful for the insurer to issue or use that form. Thecommissioner shall specify in the notice the reason for his disapproval andstate that a hearing will be granted within twenty (20) days after request inwriting by the insurer. No policy, certificate of insurance, notice of proposedinsurance, application, endorsement or rider shall be issued or used until theexpiration of thirty (30) days after it is filed, unless the commissioner giveshis prior written approval thereto.

 

(d) The commissioner, at any time after a hearing held not lessthan twenty (20) days after written notice to the insurer, may withdraw hisapproval of any form on any ground set forth in subsection (b) of this section.The written notice of hearing shall state the reason for the proposedwithdrawal.

 

(e) The insurer shall not issue or use any form after theeffective date of withdrawal.

 

(f) If a group policy of credit life insurance or creditdisability insurance is delivered in another state, the insurer shall file onlythe group certificate and notice of proposed insurance delivered or issued fordelivery in this state as specified in W.S. 26-21-107(b) and (d). Thecommissioner shall approve the forms if they conform with the requirementsspecified in W.S. 26-21-107(b) and (d) and if the schedules of premium ratesapplicable to the insurance evidenced by the certificate or notice are not inexcess of the insurer's schedules of premium rates filed with the commissioner.

 

26-21-109. Schedules of premiums; refunds.

 

 

(a) Any insurer may revise its schedules of premium rates andshall file the revised schedules with the commissioner. No insurer shall issueany credit life insurance or credit disability insurance policy for which thepremium rate exceeds that determined by the insurer's schedules then on filewith the commissioner.

 

(b) Each individual policy or group certificate shall providethat if the insurance is terminated prior to the scheduled maturity date of theindebtedness, any refund of an amount paid by the debtor for insurance shall bepaid or credited promptly to the person entitled thereto. The commissionershall prescribe a minimum refund and no refund less than the minimum need bemade. The formula to be used in computing the refund shall be filed with andapproved by the commissioner.

 

(c) If a creditor requires a debtor to make any payment forcredit life insurance or credit disability insurance and an individual policyor group certificate of insurance is not issued, the creditor shall immediatelygive written notice to the debtor and shall promptly make an appropriate creditto the account.

 

(d) The amount charged to a debtor for any credit life orcredit disability insurance shall not exceed the premiums charged by theinsurer, as computed at the time the charge to the debtor is determined.

 

26-21-110. Collection of premiums.

 

Theinsurance premium or other identifiable charge for credit life or creditdisability insurance may be collected from the insured or included in theprincipal of any loan or other transaction at the time the transaction iscompleted. If included in the principal of the loan or other transaction, astatement that the premium is included in the principal and the amount of thepremium shall be legible on the face of the policy or certificate in a sizelarger than the type used in the body of the policy or certificate.

 

26-21-111. Premium not deemed interest; gains to creditor notviolation.

 

Thepremium or cost of credit life or credit disability insurance when issuedthrough any creditor is not deemed interest or charges, or consideration or anamount in excess of permitted charges in connection with the loan or othercredit transaction. Any gain or advantage to the creditor arising out of thepremium or commission or dividend from the issuance of the insurance is not aviolation of any other law of this state.

 

26-21-112. Issuance and delivery of policies.

 

Allcredit life insurance and credit disability insurance policies shall bedelivered or issued for delivery in this state only by an insurer authorized totransact insurance in this state and shall be issued only through holders oflicenses or authorizations issued by the commissioner.

 

26-21-113. Claims.

 

 

(a) All claims shall be:

 

(i) Promptly reported to the insurer or its designated claimrepresentative, and the insurer shall maintain adequate claim files;

 

(ii) Settled as soon as possible and in accordance with theterms of the insurance contract;

 

(iii) Paid either by draft drawn upon the insurer or by check ofthe insurer to the order of the claimant to whom payment of the claim is duepursuant to the policy provisions, or upon direction of the claimant to onespecified.

 

(b) No plan or arrangement shall be used whereby any personother than the insurer or its designated claim representative is authorized tosettle or adjust claims. The creditor shall not be designated as claimrepresentative for the insurer in adjusting claims, except that a grouppolicyholder, by arrangement with the group insurer, may draw drafts or checksin payment of claims due to the group policyholder subject to the insurer'saudit and review.

 

26-21-114. Choice of debtor to use existing insurance or new insurancefor additional security.

 

Ifcredit life insurance or credit disability insurance is required as additionalsecurity for any indebtedness, the debtor, upon request to the creditor, hasthe option of furnishing the required amount of insurance through existinginsurance policies which he owns or controls or of procuring and furnishing therequired coverage through any insurer authorized to transact insurance withinthis state.

 

State Codes and Statutes

Statutes > Wyoming > Title26 > Chapter21

CHAPTER 21 - CREDIT LIFE AND DISABILITY INSURANCE

 

26-21-101. Scope and applicability of chapter.

 

 

(a) All life insurance and all disability insurance inconnection with loans or other credit transactions is subject to this chapter,except that insurance is not subject to this chapter if:

 

(i) It is in connection with a loan or other credit transactionof more than ten (10) years; or

 

(ii) The issuance of that insurance is an isolated transactionby the insurer not related to an agreement or a plan or regular course ofconduct for insuring debtors of the creditor.

 

26-21-102. Definitions.

 

 

(a) For the purpose of this chapter:

 

(i) "Credit life insurance" means insurance on thelife of a debtor pursuant to or in connection with a specific loan or othercredit transaction;

 

(ii) "Credit disability insurance" means insurance ona debtor to provide indemnity for payments becoming due on a specific loan orother credit transaction while the debtor is disabled as defined in the policy;

 

(iii) "Creditor" means the lender of money or vendor ofgoods, services or property, including a lessor under a lease intended as asecurity, rights or privileges, for which payment is arranged through a credittransaction, or any successor to the right, title or interest of any suchlender or vendor, and an affiliate, associate or subsidiary of any of them orany director, officer or employee of any of them or any other person in any wayassociated with any of them;

 

(iv) "Debtor" means a borrower of money or a purchaseror lessee of goods, services, property, rights or privileges for which paymentis arranged through a credit transaction;

 

(v) "Indebtedness" means the total amount payable bya debtor to a creditor in connection with a loan or other credit transaction.

 

26-21-103. Forms of credit life and credit disability insurance.

 

 

(a) Credit life insurance and credit disability insurance shallbe issued only in the following forms:

 

(i) Individual policies of life insurance issued to debtors onthe term plan;

 

(ii) Individual policies of disability insurance issued todebtors on a term plan, or disability benefit provisions in individual policiesof credit life insurance;

 

(iii) Group policies of life insurance issued to creditorsproviding insurance upon the lives of debtors on the term plan;

 

(iv) Group policies of disability insurance issued to creditorson a term plan insuring debtors, or disability benefit provisions in groupcredit life insurance policies to provide disability coverage.

 

26-21-104. Amount of credit life insurance.

 

 

(a) The initial amount of credit life insurance shall notexceed the total amount repayable under the contract of indebtedness.

 

(b) If an indebtedness is repayable in substantially equalinstallments, the amount of insurance shall not exceed the scheduled or actualamount of unpaid indebtedness, whichever is greater.

 

(c) Notwithstanding subsections (a) and (b) of this section,insurance on agricultural credit transactions not exceeding two (2) years induration may be written up to the amount of the loan commitment on anondecreasing or level term plan.

 

(d) Notwithstanding any other provision of law, insurance oneducational credit transaction commitments may be written for the amount of theportion of that commitment that the creditor has not advanced.

 

26-21-105. Credit disability insurance.

 

Thetotal amount of indemnity payable by credit disability insurance in case ofdisability, as defined in the policy, shall not exceed the aggregate of theperiodic scheduled unpaid installments of the indebtedness, and the amount ofeach periodic indemnity payment shall not exceed the original indebtednessdivided by the number of periodic installments.

 

26-21-106. Term of insurance.

 

 

(a) The term of any credit life insurance or credit disabilityinsurance, subject to the insurer's acceptance, commences on the date when thedebtor becomes obligated to the creditor, or the date when the debtor appliesfor the insurance, whichever is later, except that if a group policy providescoverage with respect to the existing obligations, the insurance on a debtorwith respect to the indebtedness commences on the effective date of the policy.

 

(b) If evidence of insurability is required and that evidenceis furnished more than thirty (30) days after the date when the debtor becomesobligated to the creditor, the term of the insurance may commence on the dateon which the insurer determines the evidence to be satisfactory, and in thatcase there shall be an appropriate refund or adjustment of any charge to thedebtor for insurance. The term of the insurance shall not extend more thanfifteen (15) days beyond the scheduled maturity date of the indebtedness exceptwhen extended without additional cost to the debtor.

 

(c) If the indebtedness is discharged because of renewal orrefinancing prior to the scheduled maturity date, the insurance in force shallbe terminated before any new insurance may be issued in connection with therenewed or refinanced indebtedness.

 

(d) In all cases of termination prior to scheduled maturity, arefund shall be paid or credited as provided in W.S. 26-21-109.

 

26-21-107. Provisions of policies and certificates; disclosure todebtors.

 

 

(a) All credit life insurance and credit disability insuranceshall be evidenced by an individual policy, or in the case of group insuranceby a certificate of insurance, which individual policy or group certificateshall be delivered to the debtor.

 

(b) Each individual policy or group certificate of credit lifeinsurance or credit disability insurance, or both, in addition to otherrequirements of law, shall:

 

(i) Set forth:

 

(A) The insurer's name and home office address;

 

(B) The identity by name or otherwise of the persons insured;

 

(C) The premium amount of payment, if any, by the debtorseparately for credit life insurance and credit disability insurance;

 

(D) A description of the amount, term and coverage includingany exceptions, limitations and restrictions; and

 

(ii) State that the benefits shall be paid to the creditor toreduce or extinguish the unpaid indebtedness and, if the amount of insuranceexceeds the unpaid indebtedness, the excess is payable to a beneficiary, otherthan the creditor, named by the debtor or to his estate.

 

(c) Except as otherwise provided in this section, theindividual policy or group certificate of insurance shall be delivered to theinsured debtor at the time the indebtedness is incurred.

 

(d) If a debtor makes a separate payment for credit life orcredit disability insurance and an individual policy or group certificate ofinsurance is not delivered to the debtor at the time the indebtedness isincurred, a copy of the application for the policy or a notice of proposed insuranceshall be delivered at that time to the debtor. The copy of the application for,or notice of proposed insurance, shall:

 

(i) Be signed by the debtor and shall set forth:

 

(A) The identity by name or otherwise of the person or personsinsured;

 

(B) The premium or amount of payment by the debtor, if any,separately for credit life insurance and credit disability insurance; and

 

(C) A statement that within thirty (30) days, if the insureraccepts the insurance, there shall be delivered to the debtor an individualpolicy or group certificate of insurance containing:

 

(I) The insurer's name and home office address;

 

(II) A description of the amount, term and coverage includingany exceptions, limitations and restrictions.

 

(ii) Refer exclusively to insurance coverage and shall beseparate from the loan, sale or other credit statement of account, instrumentor agreement, unless the information required by this subsection is prominentlyset forth in the copy of the application or the notice of proposed insurance.

 

(e) Upon the insurer's acceptance of the insurance and withinthirty (30) days from the date the indebtedness is incurred, the insurer shallcause the individual policy or group certificate of insurance to be deliveredto the debtor. The application or notice of proposed insurance shall state thatupon the insurer's acceptance, the insurance is effective as provided in W.S.26-21-106.

 

(f) If the named insurer does not accept the risk, the debtorshall receive a policy or certificate of insurance setting forth the name andhome office address of the substituted insurer and the amount of the premium tobe charged. If the amount of premium is less than that set forth in the noticeof proposed insurance, an appropriate refund shall be made.

 

26-21-108. Filing of policies with commissioner; approval ordisapproval; withdrawal of approval.

 

 

(a) All policies, certificates of insurance, notices ofproposed insurance, applications for insurance, endorsements and ridersdelivered or issued for delivery in this state and the schedule of premiumrates pertaining thereto shall be filed with the commissioner.

 

(b) The commissioner, within thirty (30) days after the filingof any such policies, certificates of insurance, notices of proposed insurance,applications for insurance, endorsements and riders, shall disapprove any suchform if the premium rates charged or to be charged are excessive in relation tobenefits, or if it contains provisions which are unjust, unfair, inequitable,misleading, deceptive or encourage misrepresentation of the coverage, or arecontrary to any provision of this code or of any rule or regulation promulgatedunder this code. In determining whether to disapprove any form the commissionershall consider past and prospective loss experience within and outside thisstate, underwriting practice and judgment to the extent appropriate and anyother relevant factors within and outside this state.

 

(c) If the commissioner notifies the insurer that the form isdisapproved, it is unlawful for the insurer to issue or use that form. Thecommissioner shall specify in the notice the reason for his disapproval andstate that a hearing will be granted within twenty (20) days after request inwriting by the insurer. No policy, certificate of insurance, notice of proposedinsurance, application, endorsement or rider shall be issued or used until theexpiration of thirty (30) days after it is filed, unless the commissioner giveshis prior written approval thereto.

 

(d) The commissioner, at any time after a hearing held not lessthan twenty (20) days after written notice to the insurer, may withdraw hisapproval of any form on any ground set forth in subsection (b) of this section.The written notice of hearing shall state the reason for the proposedwithdrawal.

 

(e) The insurer shall not issue or use any form after theeffective date of withdrawal.

 

(f) If a group policy of credit life insurance or creditdisability insurance is delivered in another state, the insurer shall file onlythe group certificate and notice of proposed insurance delivered or issued fordelivery in this state as specified in W.S. 26-21-107(b) and (d). Thecommissioner shall approve the forms if they conform with the requirementsspecified in W.S. 26-21-107(b) and (d) and if the schedules of premium ratesapplicable to the insurance evidenced by the certificate or notice are not inexcess of the insurer's schedules of premium rates filed with the commissioner.

 

26-21-109. Schedules of premiums; refunds.

 

 

(a) Any insurer may revise its schedules of premium rates andshall file the revised schedules with the commissioner. No insurer shall issueany credit life insurance or credit disability insurance policy for which thepremium rate exceeds that determined by the insurer's schedules then on filewith the commissioner.

 

(b) Each individual policy or group certificate shall providethat if the insurance is terminated prior to the scheduled maturity date of theindebtedness, any refund of an amount paid by the debtor for insurance shall bepaid or credited promptly to the person entitled thereto. The commissionershall prescribe a minimum refund and no refund less than the minimum need bemade. The formula to be used in computing the refund shall be filed with andapproved by the commissioner.

 

(c) If a creditor requires a debtor to make any payment forcredit life insurance or credit disability insurance and an individual policyor group certificate of insurance is not issued, the creditor shall immediatelygive written notice to the debtor and shall promptly make an appropriate creditto the account.

 

(d) The amount charged to a debtor for any credit life orcredit disability insurance shall not exceed the premiums charged by theinsurer, as computed at the time the charge to the debtor is determined.

 

26-21-110. Collection of premiums.

 

Theinsurance premium or other identifiable charge for credit life or creditdisability insurance may be collected from the insured or included in theprincipal of any loan or other transaction at the time the transaction iscompleted. If included in the principal of the loan or other transaction, astatement that the premium is included in the principal and the amount of thepremium shall be legible on the face of the policy or certificate in a sizelarger than the type used in the body of the policy or certificate.

 

26-21-111. Premium not deemed interest; gains to creditor notviolation.

 

Thepremium or cost of credit life or credit disability insurance when issuedthrough any creditor is not deemed interest or charges, or consideration or anamount in excess of permitted charges in connection with the loan or othercredit transaction. Any gain or advantage to the creditor arising out of thepremium or commission or dividend from the issuance of the insurance is not aviolation of any other law of this state.

 

26-21-112. Issuance and delivery of policies.

 

Allcredit life insurance and credit disability insurance policies shall bedelivered or issued for delivery in this state only by an insurer authorized totransact insurance in this state and shall be issued only through holders oflicenses or authorizations issued by the commissioner.

 

26-21-113. Claims.

 

 

(a) All claims shall be:

 

(i) Promptly reported to the insurer or its designated claimrepresentative, and the insurer shall maintain adequate claim files;

 

(ii) Settled as soon as possible and in accordance with theterms of the insurance contract;

 

(iii) Paid either by draft drawn upon the insurer or by check ofthe insurer to the order of the claimant to whom payment of the claim is duepursuant to the policy provisions, or upon direction of the claimant to onespecified.

 

(b) No plan or arrangement shall be used whereby any personother than the insurer or its designated claim representative is authorized tosettle or adjust claims. The creditor shall not be designated as claimrepresentative for the insurer in adjusting claims, except that a grouppolicyholder, by arrangement with the group insurer, may draw drafts or checksin payment of claims due to the group policyholder subject to the insurer'saudit and review.

 

26-21-114. Choice of debtor to use existing insurance or new insurancefor additional security.

 

Ifcredit life insurance or credit disability insurance is required as additionalsecurity for any indebtedness, the debtor, upon request to the creditor, hasthe option of furnishing the required amount of insurance through existinginsurance policies which he owns or controls or of procuring and furnishing therequired coverage through any insurer authorized to transact insurance withinthis state.

 


State Codes and Statutes

State Codes and Statutes

Statutes > Wyoming > Title26 > Chapter21

CHAPTER 21 - CREDIT LIFE AND DISABILITY INSURANCE

 

26-21-101. Scope and applicability of chapter.

 

 

(a) All life insurance and all disability insurance inconnection with loans or other credit transactions is subject to this chapter,except that insurance is not subject to this chapter if:

 

(i) It is in connection with a loan or other credit transactionof more than ten (10) years; or

 

(ii) The issuance of that insurance is an isolated transactionby the insurer not related to an agreement or a plan or regular course ofconduct for insuring debtors of the creditor.

 

26-21-102. Definitions.

 

 

(a) For the purpose of this chapter:

 

(i) "Credit life insurance" means insurance on thelife of a debtor pursuant to or in connection with a specific loan or othercredit transaction;

 

(ii) "Credit disability insurance" means insurance ona debtor to provide indemnity for payments becoming due on a specific loan orother credit transaction while the debtor is disabled as defined in the policy;

 

(iii) "Creditor" means the lender of money or vendor ofgoods, services or property, including a lessor under a lease intended as asecurity, rights or privileges, for which payment is arranged through a credittransaction, or any successor to the right, title or interest of any suchlender or vendor, and an affiliate, associate or subsidiary of any of them orany director, officer or employee of any of them or any other person in any wayassociated with any of them;

 

(iv) "Debtor" means a borrower of money or a purchaseror lessee of goods, services, property, rights or privileges for which paymentis arranged through a credit transaction;

 

(v) "Indebtedness" means the total amount payable bya debtor to a creditor in connection with a loan or other credit transaction.

 

26-21-103. Forms of credit life and credit disability insurance.

 

 

(a) Credit life insurance and credit disability insurance shallbe issued only in the following forms:

 

(i) Individual policies of life insurance issued to debtors onthe term plan;

 

(ii) Individual policies of disability insurance issued todebtors on a term plan, or disability benefit provisions in individual policiesof credit life insurance;

 

(iii) Group policies of life insurance issued to creditorsproviding insurance upon the lives of debtors on the term plan;

 

(iv) Group policies of disability insurance issued to creditorson a term plan insuring debtors, or disability benefit provisions in groupcredit life insurance policies to provide disability coverage.

 

26-21-104. Amount of credit life insurance.

 

 

(a) The initial amount of credit life insurance shall notexceed the total amount repayable under the contract of indebtedness.

 

(b) If an indebtedness is repayable in substantially equalinstallments, the amount of insurance shall not exceed the scheduled or actualamount of unpaid indebtedness, whichever is greater.

 

(c) Notwithstanding subsections (a) and (b) of this section,insurance on agricultural credit transactions not exceeding two (2) years induration may be written up to the amount of the loan commitment on anondecreasing or level term plan.

 

(d) Notwithstanding any other provision of law, insurance oneducational credit transaction commitments may be written for the amount of theportion of that commitment that the creditor has not advanced.

 

26-21-105. Credit disability insurance.

 

Thetotal amount of indemnity payable by credit disability insurance in case ofdisability, as defined in the policy, shall not exceed the aggregate of theperiodic scheduled unpaid installments of the indebtedness, and the amount ofeach periodic indemnity payment shall not exceed the original indebtednessdivided by the number of periodic installments.

 

26-21-106. Term of insurance.

 

 

(a) The term of any credit life insurance or credit disabilityinsurance, subject to the insurer's acceptance, commences on the date when thedebtor becomes obligated to the creditor, or the date when the debtor appliesfor the insurance, whichever is later, except that if a group policy providescoverage with respect to the existing obligations, the insurance on a debtorwith respect to the indebtedness commences on the effective date of the policy.

 

(b) If evidence of insurability is required and that evidenceis furnished more than thirty (30) days after the date when the debtor becomesobligated to the creditor, the term of the insurance may commence on the dateon which the insurer determines the evidence to be satisfactory, and in thatcase there shall be an appropriate refund or adjustment of any charge to thedebtor for insurance. The term of the insurance shall not extend more thanfifteen (15) days beyond the scheduled maturity date of the indebtedness exceptwhen extended without additional cost to the debtor.

 

(c) If the indebtedness is discharged because of renewal orrefinancing prior to the scheduled maturity date, the insurance in force shallbe terminated before any new insurance may be issued in connection with therenewed or refinanced indebtedness.

 

(d) In all cases of termination prior to scheduled maturity, arefund shall be paid or credited as provided in W.S. 26-21-109.

 

26-21-107. Provisions of policies and certificates; disclosure todebtors.

 

 

(a) All credit life insurance and credit disability insuranceshall be evidenced by an individual policy, or in the case of group insuranceby a certificate of insurance, which individual policy or group certificateshall be delivered to the debtor.

 

(b) Each individual policy or group certificate of credit lifeinsurance or credit disability insurance, or both, in addition to otherrequirements of law, shall:

 

(i) Set forth:

 

(A) The insurer's name and home office address;

 

(B) The identity by name or otherwise of the persons insured;

 

(C) The premium amount of payment, if any, by the debtorseparately for credit life insurance and credit disability insurance;

 

(D) A description of the amount, term and coverage includingany exceptions, limitations and restrictions; and

 

(ii) State that the benefits shall be paid to the creditor toreduce or extinguish the unpaid indebtedness and, if the amount of insuranceexceeds the unpaid indebtedness, the excess is payable to a beneficiary, otherthan the creditor, named by the debtor or to his estate.

 

(c) Except as otherwise provided in this section, theindividual policy or group certificate of insurance shall be delivered to theinsured debtor at the time the indebtedness is incurred.

 

(d) If a debtor makes a separate payment for credit life orcredit disability insurance and an individual policy or group certificate ofinsurance is not delivered to the debtor at the time the indebtedness isincurred, a copy of the application for the policy or a notice of proposed insuranceshall be delivered at that time to the debtor. The copy of the application for,or notice of proposed insurance, shall:

 

(i) Be signed by the debtor and shall set forth:

 

(A) The identity by name or otherwise of the person or personsinsured;

 

(B) The premium or amount of payment by the debtor, if any,separately for credit life insurance and credit disability insurance; and

 

(C) A statement that within thirty (30) days, if the insureraccepts the insurance, there shall be delivered to the debtor an individualpolicy or group certificate of insurance containing:

 

(I) The insurer's name and home office address;

 

(II) A description of the amount, term and coverage includingany exceptions, limitations and restrictions.

 

(ii) Refer exclusively to insurance coverage and shall beseparate from the loan, sale or other credit statement of account, instrumentor agreement, unless the information required by this subsection is prominentlyset forth in the copy of the application or the notice of proposed insurance.

 

(e) Upon the insurer's acceptance of the insurance and withinthirty (30) days from the date the indebtedness is incurred, the insurer shallcause the individual policy or group certificate of insurance to be deliveredto the debtor. The application or notice of proposed insurance shall state thatupon the insurer's acceptance, the insurance is effective as provided in W.S.26-21-106.

 

(f) If the named insurer does not accept the risk, the debtorshall receive a policy or certificate of insurance setting forth the name andhome office address of the substituted insurer and the amount of the premium tobe charged. If the amount of premium is less than that set forth in the noticeof proposed insurance, an appropriate refund shall be made.

 

26-21-108. Filing of policies with commissioner; approval ordisapproval; withdrawal of approval.

 

 

(a) All policies, certificates of insurance, notices ofproposed insurance, applications for insurance, endorsements and ridersdelivered or issued for delivery in this state and the schedule of premiumrates pertaining thereto shall be filed with the commissioner.

 

(b) The commissioner, within thirty (30) days after the filingof any such policies, certificates of insurance, notices of proposed insurance,applications for insurance, endorsements and riders, shall disapprove any suchform if the premium rates charged or to be charged are excessive in relation tobenefits, or if it contains provisions which are unjust, unfair, inequitable,misleading, deceptive or encourage misrepresentation of the coverage, or arecontrary to any provision of this code or of any rule or regulation promulgatedunder this code. In determining whether to disapprove any form the commissionershall consider past and prospective loss experience within and outside thisstate, underwriting practice and judgment to the extent appropriate and anyother relevant factors within and outside this state.

 

(c) If the commissioner notifies the insurer that the form isdisapproved, it is unlawful for the insurer to issue or use that form. Thecommissioner shall specify in the notice the reason for his disapproval andstate that a hearing will be granted within twenty (20) days after request inwriting by the insurer. No policy, certificate of insurance, notice of proposedinsurance, application, endorsement or rider shall be issued or used until theexpiration of thirty (30) days after it is filed, unless the commissioner giveshis prior written approval thereto.

 

(d) The commissioner, at any time after a hearing held not lessthan twenty (20) days after written notice to the insurer, may withdraw hisapproval of any form on any ground set forth in subsection (b) of this section.The written notice of hearing shall state the reason for the proposedwithdrawal.

 

(e) The insurer shall not issue or use any form after theeffective date of withdrawal.

 

(f) If a group policy of credit life insurance or creditdisability insurance is delivered in another state, the insurer shall file onlythe group certificate and notice of proposed insurance delivered or issued fordelivery in this state as specified in W.S. 26-21-107(b) and (d). Thecommissioner shall approve the forms if they conform with the requirementsspecified in W.S. 26-21-107(b) and (d) and if the schedules of premium ratesapplicable to the insurance evidenced by the certificate or notice are not inexcess of the insurer's schedules of premium rates filed with the commissioner.

 

26-21-109. Schedules of premiums; refunds.

 

 

(a) Any insurer may revise its schedules of premium rates andshall file the revised schedules with the commissioner. No insurer shall issueany credit life insurance or credit disability insurance policy for which thepremium rate exceeds that determined by the insurer's schedules then on filewith the commissioner.

 

(b) Each individual policy or group certificate shall providethat if the insurance is terminated prior to the scheduled maturity date of theindebtedness, any refund of an amount paid by the debtor for insurance shall bepaid or credited promptly to the person entitled thereto. The commissionershall prescribe a minimum refund and no refund less than the minimum need bemade. The formula to be used in computing the refund shall be filed with andapproved by the commissioner.

 

(c) If a creditor requires a debtor to make any payment forcredit life insurance or credit disability insurance and an individual policyor group certificate of insurance is not issued, the creditor shall immediatelygive written notice to the debtor and shall promptly make an appropriate creditto the account.

 

(d) The amount charged to a debtor for any credit life orcredit disability insurance shall not exceed the premiums charged by theinsurer, as computed at the time the charge to the debtor is determined.

 

26-21-110. Collection of premiums.

 

Theinsurance premium or other identifiable charge for credit life or creditdisability insurance may be collected from the insured or included in theprincipal of any loan or other transaction at the time the transaction iscompleted. If included in the principal of the loan or other transaction, astatement that the premium is included in the principal and the amount of thepremium shall be legible on the face of the policy or certificate in a sizelarger than the type used in the body of the policy or certificate.

 

26-21-111. Premium not deemed interest; gains to creditor notviolation.

 

Thepremium or cost of credit life or credit disability insurance when issuedthrough any creditor is not deemed interest or charges, or consideration or anamount in excess of permitted charges in connection with the loan or othercredit transaction. Any gain or advantage to the creditor arising out of thepremium or commission or dividend from the issuance of the insurance is not aviolation of any other law of this state.

 

26-21-112. Issuance and delivery of policies.

 

Allcredit life insurance and credit disability insurance policies shall bedelivered or issued for delivery in this state only by an insurer authorized totransact insurance in this state and shall be issued only through holders oflicenses or authorizations issued by the commissioner.

 

26-21-113. Claims.

 

 

(a) All claims shall be:

 

(i) Promptly reported to the insurer or its designated claimrepresentative, and the insurer shall maintain adequate claim files;

 

(ii) Settled as soon as possible and in accordance with theterms of the insurance contract;

 

(iii) Paid either by draft drawn upon the insurer or by check ofthe insurer to the order of the claimant to whom payment of the claim is duepursuant to the policy provisions, or upon direction of the claimant to onespecified.

 

(b) No plan or arrangement shall be used whereby any personother than the insurer or its designated claim representative is authorized tosettle or adjust claims. The creditor shall not be designated as claimrepresentative for the insurer in adjusting claims, except that a grouppolicyholder, by arrangement with the group insurer, may draw drafts or checksin payment of claims due to the group policyholder subject to the insurer'saudit and review.

 

26-21-114. Choice of debtor to use existing insurance or new insurancefor additional security.

 

Ifcredit life insurance or credit disability insurance is required as additionalsecurity for any indebtedness, the debtor, upon request to the creditor, hasthe option of furnishing the required amount of insurance through existinginsurance policies which he owns or controls or of procuring and furnishing therequired coverage through any insurer authorized to transact insurance withinthis state.

 

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