TN Code § 45-5-305 (2021)
2021 Tennessee Code|Title 45 - Banks and Financial Institutions|Chapter 5 - Industrial Loan and Thrift Companies|Part 3 - Powers of Registered Companies|§ 45-5-305. Insurance

  With respect to all insurance offered, sold or procured pursuant to the powers given registrants under § 45-5-301(4) and (5):  The insurance shall be written by an agent and with a company authorized to do business in Tennessee, or under a group policy issued by a company authorized to do business in Tennessee, at rates approved by the commissioner of commerce and insurance;   The borrower has the right to furnish the insurance through any agent or company the borrower desires, if the insurance company is in good standing with the department; or the borrower may authorize the registrant to obtain the insurance for the borrower, and when so authorized by written request, which writing shall be preserved by the company during the term of the loan and for a period of at least two (2) years thereafter, the registrant may have the insurance written by an agent who is an employee, servant, or agent of the registrant, or the insurance may be effected under a group policy issued to the registrant. Any gain or advantage to a registrant or any employee, officer, director, agent, affiliate or associate of the registrant from the insurance or its sale shall not be considered as additional or further charge or interest in connection with any loan made under this chapter; and   The amount and type of insurance that may be required or accepted shall bear a reasonable relation to the existing hazard and risk of loss and shall be subject to the following terms and conditions:  Life insurance shall be in an amount that does not exceed the total amount of the loan and shall be for a period that does not exceed the term of the loan;   Insurance against the hazard of disability of the borrower shall provide equal benefits, the total of all of which shall not exceed the total amount of the loan and shall not be payable beyond the maturity of the loan. The required time of continuous and total disability of the borrower before the beginning of the payment of benefits under the terms of the policy shall be at least seven (7) days, after which time benefits may accrue from then forward or may be retroactive to the first day of disability. Nothing in this subdivision (a)(3)(B) shall be construed to prevent the issuance of insurance requiring more than seven (7) days waiting period;   Property insurance on collateral required pursuant to § 45-5-301(4) shall include only coverage that bears a reasonable relationship to the existing hazards or risk of loss in an amount not in excess of the total amount of the loan or for a term not longer than the term of the loan. If a minimum dollar premium is charged or retained, the total amount so charged to or retained from a borrower or spouse or both by a lender and affiliated lenders in any one (1) year shall not exceed the minimum dollar premium approved by the commissioner of financial institutions for that type of insurance. Neither shall the insurance be required during a period of time when there is adequate property insurance in force that was written in connection with any loan made by the same registrant or an affiliated lender to the same borrower or spouse, or both;   Insurance against the hazard of involuntary unemployment shall provide for a specified number of monthly benefit payments during a specified term of coverage expressed in number of months; provided, that the term of coverage shall not exceed sixty (60) months, and the number of monthly benefit payments shall be at least one-third (1/3) the number of months in the term of coverage;   A registrant that obtains a group policy for the purpose of perfecting any insurance that may be required or accepted hereunder, or that obtains any life, disability, property, or involuntary unemployment insurance described in subdivisions (a)(3)(A)-(D), at the request of the borrower, shall contract with the insurance company for a provision in the policy that the coverage effected as to each individual insured debtor or borrower shall terminate automatically on prepayment in full of the loan by refinancing, renewal or otherwise, and the unearned premium shall be refunded to the registrant. The registrant shall pay or credit the unearned premium refund to the borrower. Only one (1) policy or group certificate of each of these types of insurance shall be accepted as collateral on any one (1) loan, except in the case of joint life insurance, and except in the case of joint disability insurance;   At the time the loan is made, the lender shall give to the borrower:   An insurance policy, a binder, or a certificate of insurance; or   A memorandum showing the name of the insurance company, the types of insurance issued, a description of the coverages, the date of the policy, which shall be the date on which the loan is made, the premium charge for each type of insurance, and if issued under a group policy, the number of the master policy;     If the premiums for insurance are paid from the proceeds of the loan, the amount so paid shall not exceed the premiums charged by the insurer for the insurance; and   In addition to this chapter, registrants shall have the power to accept or sell credit life and credit health and accident insurance pursuant to and in accordance with title 56, chapter 7, part 9.       The acceptance or sale of credit-related insurance products by registrants shall be subject to the following provisions:  The maximum term life insurance coverage and the maximum accidental death or dismemberment coverage available to one insured through a registrant shall not exceed twenty-five thousand dollars ($25,000) for each coverage, and the maximum term for each credit-related life insurance product shall not exceed sixty (60) months;   The registrant shall provide to each prospective insured a separate disclosure statement, signed by both the borrower or borrowers and the registrant's agent indicating the following:  The borrower's or borrowers' desire or desires to purchase the insurance as described in the disclosure statement;   The borrower or borrowers fully understand that buying the insurance is not a condition of the loan. The disclosure shall be made in bold face print appearing in the disclosure statement. In addition, notice of the disclosure shall be posted at any physical location where customers are served;   The owner of the policy may cancel the policy within thirty (30) days after the policy is issued and receive a full refund of the premium paid, by returning the policy to the insurer or upon written instructions to the insurer from the policy owner;   The owner of the policy may also cancel the policy more than thirty (30) days after the policy has been issued by giving notice of cancellation to the insurer, and on cancellation, the owner of the policy shall receive a portion of the premium paid in accordance with the terms of the policy; and   A statement with three (3) representative examples of the purchase of insurance under this section indicating the total amount of interest payable for each example of a loan and the amount of interest of the loan attributable to the insurance purchased under this section; and     Credit-related insurance products shall be treated as credit life insurance or credit accident and health insurance only as those terms are used in title 56, chapter 6, part 2 and title 56, chapter 8, part 1; credit-related insurance products shall not be treated as credit life insurance, credit accident and health insurance or credit disability insurance as those terms are otherwise used in title 56; provided, that this subsection (b) shall not affect any other provision of title 56, or any regulation adopted pursuant thereto.