An Act to provide for the regulation of credit life insurance and credit accident and health insurance in the District of Columbia
PL 87-686 (S.2357), enacted 09/25/1962

580 
PUBLIC LAW 87-686-SEPT. 25, 1962 
[76 STAT. 
September 25, 1962 
[S.2357] 
Public Law 87-686 
AN ACT 
To provide for the regulation of credit life insurance and credit accident and 
health insurance in the District of Columbia. 
The Act for the 
Regulation of 
Credit Life Insur-
ance and Credit 
Accident and 
Health Insurance. 
Be it eTiacted hy the Sermte and House of Representatives 
of the 
United States of America in Congress assembled^ That (a) this Act, 
regulating credit life insurance and credit accident and health insur-
ance in the District of Columbia may be cited as "The Act for the 
Regulation of Credit Life Insurance and Credit Accident and Health 
Insurance". 
(b) All life insurance and all accident and health insurance in con-
nection with loans or other credit transactions of less than five years 
duration in the District of Columbia shall be subject to the provisions 
of this Act. Such insurance written in connection with a loan or other 
credit transaction of five years duration or more shall not be subject 
to the provisions of this Act, nor shall such insurance be subject to the 
provisions of this Act if the issuance of the insurance is an isolated 
transaction on the part of the insurer not related to a plan or regular 
course of conduct for insuring debtors of the creditor. 
DEFINITIONS 
SEC. 2. For the purpose of this Act— 
(a) "Commissioners" means the Commissioners of the District of 
Columbia; 
(b) "Credit life insurance" means insurance issued on the life of a 
debtor pursuant to or in connection with a specific loan or other credit 
transaction; 
(c) "Credit accident and health insurance" means insurance against 
the disability of a debtor which provides indemnity for payments on 
a specific loan or other credit transaction; 
(d) "Creditor" means the lender of money or vendor of goods, 
services, or property, including a lessor under a lease intended as a 
security, tor which payment is arranged through a loan or other credit 
transaction, and includes any successor to the right, title, or interest 
of any such lender, vendor, or lessor; 
(e) "Debtor" means a borrower of money or purchaser of goods, 
services, or property, including a lessee under a lease intended as a 
security, for which payment is arranged through a loan or other 
credit transaction; 
(f) "District" means the District of Columbia; 
(g) "Indebtedness" means the amount payable by a debtor to a 
creditor in connection with a loan or other credit transaction; and 
(h) "Superintendent" means the Superintendent of Insurance of 
the District of Columbia. 
FORMS OF CREDIT LIFE INSURANCE AND CREDIT ACCIDENT AND H E A L T H 
INSURANCE 
SEC. 3. Credit life insurance and credit accident and health insur-
ance shall be issued only in the following forms: 
(a) Individual policies of life insurance issued to debtors on the 
term plan; 
(b) Individual policies of accident and health insurance issued to 
debtors on a term plan or disability provisions in individual life 
policies to provide such coverage; 
(c) Group policies of life insurance issued to creditors providing 
insurance upon the lives of debtors on the term plan; 
76 STAT. ] 
PUBLIC LAW 87-686-SEPT. 25, 1962 
581 
(d) Group policies of accident and health insurance issued to cred-
itors on a term plan insuring debtors or disability provisions in group 
life policies to provide such coverage. 
AMOUNT OF CREDIT LIFE INSURANCE AND CREDIT ACCIDENT AND 
H E A L T H 
INSURANCE 
SEC. 4. (a) The amount of credit life insurance shall not exceed 
the initial indebtedness however the indebtedness may be repayable: 
Provided^ h(yuyevei\ That nothing contained herein shall be deemed to 
supersede or repeal the limitation on the amount of group insurance 
specified in section 10(2) (d) of chapter V of the Life Insurance Act 
of the District of Columbia, as amended (48 Stat. 1164; sec. 35-710 
(2)(d), D.C. Code, 1951 ed.). In cases where an indebtedness is 
64 stat. 330. 
repayable in substantially equal installments, the amount of insurance 
shall at no time exceed the scheduled amount of unpaid indebtedness 
in the case of any individual policy or the actual amount of the unpaid 
indebtedness in the case of any group policy. 
(b) The amount of indemnity payable by credit accident and health 
insurance in the event of disability, as defined in the policy, shall not 
exceed the aggregate of the periodic scheduled unpaid installments of 
indebtedness; and the amount of each periodic indemnity payment 
shall not exceed the original indebtedness divided by the number of 
periodic installments. 
TERM OF CREDIT LIFE INSURANCE AND CREDIT ACCIDENT 
AND 
H E A L T H 
INSURANCE 
SEC. 5. The term of any credit life insurance or credit accident and 
health insurance shall, subject to acceptance by the insurance company, 
commence on the date when the debtor becomes obligated to the 
creditor, except that where a group policy provides coverage with 
respect to existing obligations the insurance on a debtor with respect 
to such indebtedness shall commence on the effective date of the policy. 
Where evidence of insurability is required and such evidence is fur-
nished more than thirty days from the date when the debtor becomes 
obligated to the creditor, the term of the insurance may commence on 
the date on which the insurance company determines the evidence to 
be satisfactory, and in such event there shall be an appropriate refmid 
or adjustment of any charge to the debtor for insurance. The term 
of such insurance shall not extend more than fifteen days beyond the 
scheduled maturity date of the indebtedness except when extended 
without additional cost to the debtor. 
If the indebtedness is dis-
charged due to renewal or refinancing prior to the scheduled maturity 
date, the insurance in force shall be terminated before any new 
insurance may be issued in connection with the renewal or refuianoed 
indebtedness. 
In all cases of termination prior to scheduled maturity, 
a refund shall be paid or credited as provided in section 8. 
PROVISIONS OF POLICIES AND CERTIFICATES OF INSURANCE; DISCLOSURE TO 
DEBTORS 
SEC. 6. (a) All credit life insurance and credit accident and health 
insurance shall be evidenced by an individual policy, or in the case of 
group insurance by a group policy and individual certificates of in-
surance. 
(b) Each individual policy or certificate of credit life insurance, 
each individual policy or certificate of credit accident and health in-
surance, and each individual policy or certificate of credit life insur-
582 
PUBLIC LAW 87-686-SEPT. 25, 1962 
[76 STAT. 
ance and credit accident and health insurance shall, in addition to 
other requirements of law, set forth the name and home office address 
of the insurance company, and the identity by name or otherwise of 
the person insured, the rate or amount of payment, if any, by the 
debtor separately in connection with credit life insurance and credit 
accident and health insurance, a description of the coverage, including 
the amount and term thereof (which in the case of group insurance 
may be by description rather than stated amount and term), any ex-
ceptions, limitations, or restrictions, and shall state that the benefits 
shall be paid to the creditor to reduce or extinguish the unpaid in-
debtedness and, whenever the amount of insurance may exceed the 
unpaid indebtedness, that any such excess shall be payable to a bene-
ficiary, other than the creditor, named by the debtor or to his estate. 
(c) Except as hereinafter provided, an individual policy or cer-
tificate of insurance shall be delivered to the insured debtor at the 
time the indebtedness is incurred. 
(d) If a debtor makes a separate payment for credit life or credit 
accident and health insurance and an individual policy or certificate 
of insurance is not delivered to the debtor at the time the indebtedness 
is incurred, a copy of the application for such policy or a notice of pro-
posed insurance shall be delivered at such time to the debtor by the 
creditor. The copy of the application for or notice of proposed insur-
ance shall be signed by the debtor and shall set forth the identity by 
name or otherwise of the person insured; the rate or amount of pay-
ment by the debtor separately for credit life insurance and credit acci-
dent and health insurance; and a statement that within thirty days, 
if the insurance is accepted by the insurance company, there will be 
delivered to the debtor an individual policy or certificate of insurance 
containing the name and home office address of the insurance company, 
and a description of the amount, term, and coverage including any 
exceptions, limitations, and restrictions. The copy of the application 
for, or notice of, proposed insurance shall refer exclusively to insur-
ance coverage, and shall be separate and apart from the loan, sale, or 
other credit statement of account, instrument, or agreement unless the 
information required by this subsection is prominently set forth in 
such statement of account, instrument, or agreement. 
If a debtor 
does not make a separate payment for credit life or credit accident 
and health insurance, an application need not be taken or a notice of 
proposed insurance given. In any case, upon acceptance of the insur-
ance^by the insurance company, and within thirty days of the date 
upon which the term of the insurance commences, the insurance com-
pany shall cause the individual policy or certificate of insurance to 
be delivered to the debtor. 
Said application or notice of proposed 
insurance shall state that, upon acceptance by the insurance company, 
the insurance shall become effective as provided in section 5. 
FILING, APPROVAL, AND WITHDRAWAL OF FORMS 
SEC. 7. (a) All forms of policies, certificates of insurance,.notices of 
proposed insurance, applications for insurance, binders, endorsements 
and riders delivered or issued for delivery in the District and the 
premium rates pertaining thereto shall be filed with the Superintend-
ent by the insurance company, in such manner and together with 
such supporting information as the Superintendent may reasonably 
require. 
In any case where a group policy is made for a group in 
the District and the policy is neither delivered nor issued for delivery 
in the District, the form of policy and all other forms and premium 
rates referred to in the preceding sentence shall be filed with the 
Superintendent by the insurance company. 
76 STAT. ] 
PUBUC LAW 87-686-SEPT. 25, 1962 
583 
(b) The Superintendent may, within thirty days after the filing of 
any form of policy, certificate of insurance, notice of proposed insur-
ance, application for insurance, binder, endorsement or rider, dis-
approve any such form if the premium rates charged or to be charged 
appear by reasonable assumptions to be excessive in relation to benefits 
paid or to be paid, or if the form contains provisions which are unjust, 
unfair, inequitable, misleading, or deceptive. In determining whether 
to disapprove any such form the Superintendent may give due con-
sideration to past and prospective loss experience within and outside 
the District, to underwriting practice and judgment to the extent 
appropriate, and to all other relevant factors within and outside the 
District, and he may take into account the experience of the individual 
company. 
(c) If the Superintendent notifies the insurance company that the 
form does not comply with the requirements of this Act, it shall be 
unlawful thereafter for such insurance company to issue or use such 
form. 
In such notice, the Superintendent shall specify the reason for 
his disapproval and state that a hearing will be granted promptly 
upon request in writing by the insurance company. 
No such policy, 
certificate of insurance, notice of proposed insurance, application for 
insurance, binder, endorsement, or rider shall be issued or used until 
the expiration of thirty days after it has been so filed, unless the 
Superintendent shall give his prior written approval thereto. 
(d) The Superintendent may, at any time after a hearing, held after 
not less than twenty days' written notice to the insurance company, 
withdraw his approval of any such form if it does not meet the 
requirements of this Act. 
(e) The insurance company shall not issue such forms or use them 
after the effective date of such withdrawal of approval. 
(f) The insurance company may revise such forms and the premium 
rates pertaining thereto from time to time, and such revised forms 
and premium rates shall be filed with the Superintendent and shall 
be subject to all the preceding requirements of this section, in like 
manner as though they were original filings with the Superintendent. 
REFUNDS 
SEC. 8. (a) Each individual policy or certificate of credit life insur-
ance or credit accident and health insurance shall provide that in the 
event of termination of the insurance prior to the scheduled maturity 
date of the indebtedness, any refund of an amount paid by the debtor 
for insurance shall be paid or credited promptly to the person entitled 
thereto: Provided, That the Superintendent shall prescribe a minimum 
refund and no refund which would be less than such minimum need 
be made. The formula to be used in computing refunds shall be filed 
with the Superintendent who may disapprove such formula if he 
finds that it is unjust or unreasonable. 
(b) If a creditor requires a debtor to make a payment in connection 
with credit life insurance or credit accident and health insurance and 
an individual policy or certificate of insurance is not issued, the cred-
itor shall promptly give written notice to such debtor and shall 
promptly make an appropriate credit to the account. 
(c) The amount charged to a debtor for credit life or credit accident 
and health insurance shall not exceed the premium rate charged by 
the insurance company at the time the charge to the debtor is 
determined. 
584 
PUBLIC LAW 87-686-SEPT. 25, 1962 
[76 STAT. 
CLAIMS 
SEC. 9. (gi) All claims shall be paid either by draft drawn upon the 
insurance company or by check of the insurance company to the order 
of the claimant to whom payment of the claim is due pursuant to 
the policy provisions, or upon direction of such claimant to one 
specified, and every insurance company shall be held to strict settle-
ment of all such claims. 
(b) It shall be unlawful for any creditor, having received any such 
check or draft from such insurance company, to fail to correctly 
credit the account, pay to or upon the direction of, or otherwise cor-
rectly account to the claimant to whom payment is due for the full 
amount of such check or draft, less any lawful deductions therefrom. 
(c) No plan or arrangement shall be used whereby any person, firm, 
or corporation other than the insurance company or its designated 
claim representative shall be authorized to settle or adjust claims. 
The creditor shall not be designated as claim representative for the 
insurance company in adjusting claims, nor, in the case of an individ-
ual creditor, shall the spouse of such creditor or any relative of the 
creditor or spouse within the third degree of consanguinity be so 
designated, nor shall any officer or employee of a corporate creditor 
or any spouse or relative of such officer, employee, or spouse within 
the third degree of consanguinity be so designated: Provided^ That a 
group policyholder may, by arrangement with the group insurance 
company, draw drafts or checks in payment of claims due to the 
group policyholder subject to audit and review by the insurance 
company. 
E X I S l l N G INSURANCE—CHOICE OF 
INSURER 
SEC. 10. When credit life insurance or credit accident and health 
insurance is required as additional security for any indebtedness, the 
creditor may not require that the insurance be written through any 
particular insurance company or any particular agent, and the debtor 
shall, upon request to the creditor, have the option of furnishing the 
required amount of insurance through existing policies of insurance 
owned or controlled by him or of procuring and furnishing the 
required coverage through any insurance company authorized to trans-
act an insurance business within the District. 
ENFORCEMENT 
SEC. 11. (a) In the case of any violation of this Act by an insurance 
company, agent, solicitor, or broker, the Superintendent shall have 
authority to proceed in accordance with the provisions of sections 6 
and 27 of the Act approved June 19, 1934, as amended (48 Stat. 1131 
72 Stat. 20, 21. and 1140; sees. 35-405 and 35-426, D.C. Code, 1951 ed.), and sections 
3 and 36 of the Act approved October 9, 1940, as amended (54 Stat. 
72 Stat. 21, 25. 1066 and 1079; sees. 35-1306 and 35-1340, D.C. Code, 1951 ed.). 
(b) In the case of any violation of this Act by a creditor or by any 
other person not licensed in the District as an insurance agent, 
solicitor, or broker, regardless of the fact that such creditor or other 
person is not required by law to be so licensed, the penalties and the 
procedure for their imposition shall be as set forth in section 43 of the 
Act approved October 9,1940, as amended (54 Stat. 1082; sec. 35-1347, 
D.C. Code, 1951 ed.). 
76 STAT. ] 
PUBLIC LAW 87-687-SEPT. 25, 1962 
585 
JUDICIAL 
REVIEW 
SEC. 12. Any insurance company, agent, solicitor, or broker ag-
grieved by any order or action of the Superintendent under this Act 
may contest the validity of such order or action by appeal or through 
any other appropriate proceeding, in accordance with the procedures 
prescribed by sections 44 and 45 of the Act approved October 9, 1940, 
as amended (54 Stat. 1082; sees. 35-1348 and 35-1349, D.C. Code, 1951 
ed.) : Provided^ That any such insurance company, agent, solicitor, or 
broker which is licensed in the District under the Life Insurance Act 
approved June 19,1934, as amended (48 Stat. 1127, et seq.; sec. 35-301, 
et seq., D.C. Code, 1951 ed.), may contest the validity of such order 
or action by appeal or through any other appropriate proceeding in 
accordance with the procedures prescribed by such Act approved June 
19,1934. 
EFFECT OF REORGANIZATION PLAN NUMBERED 5 OF 195 2 
SEC. 13. Nothing in this Act shall be construed so as to affect the 
authority vested in the Commissioners by Reorganization Plan Num-
bered 5 of 1952 (66 Stat. 824). The performance of any function 
D. C. code title 
vested by this Act in the Commissioners or in any office or agency under ^ ^PP-
the jurisdiction and control of said Commissioners may be delegated 
by said Commissioners in accordance with section 3 of such plan. 
E F F E C n V E DA'l^ 
S E C 14. This Act shall take effect ninety days after its approval. 
Approved September 25, 1962. 
Public Law 87-687 
AN A C T 
September 25, 1962 
To correct certain land descriptions in the Act entitled "An Act to declare that 
[s. 2696] 
the United States holds in trust for the pueblos of Santa Ana, Zia, Jemez, 
San Felipe, Santo Domingo, Cochiti, Isleta, and San Ildefonso certain public 
domain lands". 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled, That section 7 of the 
Indian puebios. 
Act entitled "An Act to declare that the United States holds in trust ^Land'descrip-
for the pueblos of Santa Ana, Zia, Jemez, San Felipe, Santo Domingo, tions, correction. 
Cochiti, Isleta, and San Ildefonso certain public domain lands", 
approved September 14, 1961 (75 Stat. 500)^ is amended by striking 
75 stat. so4. 
out— 
"Township 8 north, range 2 east: 
"Section 4, lots 1, 2, 3, 4, 13, 14, 15, and 16, south half north 
half; 
"Section 6, lots 1, 2, 12, 13, 14, and 15, northeast quarter east 
half northwest quarter." 
and inserting in lieu thereof 
"Township 8 north, range 1 east: 
"Section 4, lots 1, 2, 3, 4, 13, 14, 15, and 16, south half north 
half; 
"Section 6, lots 1, 2, 12, 13, 14, and 15, northeast quarter, east 
half northwest quarter." 
Approved September 25, 1962.