Alabama Administrative Code › Title 482 - ALABAMA DEPARTMENT OF INSURANCE › Chapter 482-1-117 - CREDIT LIFE AND DISABILITY INSURANCE › Section 482-1-117-.04 - Definitions

Current through Register Vol. 42, No. 9, June 28, 2024
The following definitions shall apply for purposes of this
				chapter:
(a) Affiliate. As defined in
			 Section 27-29-1,
Code of Ala.
			 1975
.
(b) Closed-end
			 credit. A credit transaction that does not meet the definition of open-end
			 credit.
(c) Commissioner. The
			 Alabama Commissioner of Insurance.
(d) Compensation. Commissions, dividends,
			 retrospective rate credits, service fees, expense allowances or reimbursements,
			 gifts, furnishing of equipment, facilities, goods or services, or any other
			 form of remuneration resulting directly from the sale of consumer credit
			 insurance.
(e) Consumer credit
			 insurance. Refers to "credit life insurance" and "credit disability insurance"
			 as defined in this rule.
(f)
			 Control. As defined in Section
			 27-29-1,
Code of Ala.
			 1975
.
(g) Credit
			 disability insurance. Insurance on a debtor or debtors to provide indemnity for
			 payments or debt becoming due on a specific credit transaction, in whole or in
			 part, while the debtor is disabled as defined in the policy, and which
			 precludes debtor selection of primary beneficiary.
(h) Credit life insurance. Insurance on a
			 debtor or debtors, in connection with a specific credit transaction, to provide
			 for satisfaction of a debt, in whole or in part, upon the death of an insured
			 debtor, and which precludes debtor selection as to primary
			 beneficiary.
(i) Credit
			 transaction. Any transaction by the terms of which the repayment of money
			 loaned or loan commitment made, or payment for goods, services or properties
			 sold or leased, is to be made at a future date or dates. It is acknowledged
			 that the Alabama Consumer Credit Act does not apply to true leases; however, it
			 is intended that consumer credit insurance issued or sold in connection with
			 true leases be subject to this chapter to the extent provided herein.
(j) Creditor. A person who regularly extends
			 or arranges for the extension of credit for which the payment of a finance
			 charge is required, whether in connection with loans, sales of property or
			 services, or otherwise, and, for purposes of this chapter, "creditor" also
			 includes a lessor, and any successor of the foregoing.
(k) Debtor. A borrower of money or a
			 purchaser or lessee of goods, services, property, rights or privileges for
			 which payment is arranged through a credit transaction.
(l) Evidence of individual insurability. A
			 statement furnished by the debtor, as a condition of insurance becoming
			 effective, that relates specifically to the health status or to the health or
			 medical history of the debtor, or to the occupation of the insured debtor or
			 other information related to the insured debtor. This definition specifically
			 excludes information related to the eligibility of the debtor for
			 coverage.
(m) Gross debt. The sum
			 of the remaining payments, including principal, interest, and other lawful
			 charges, owed to the creditor by the debtor. For leases, "gross debt" means the
			 sum of the remaining lease payments plus any residual payments, whether
			 optional or mandatory.
(n)
			 Identifiable charge. A charge for a type of consumer credit insurance that is
			 made to insured debtors and not made to uninsured debtors; it includes a charge
			 for insurance that is disclosed in the credit or other instrument furnished to
			 the debtor which sets out the financial elements of the credit transaction and
			 any difference in the finance, interest, service or other similar charge made
			 to debtors who are in like circumstances except for the insured or non-insured
			 status of the debtor or the insured or non-insured status of the property used
			 as security for the credit transaction.
(o) Insurer. As defined in Section
			 27-1-2,
Code of Ala.
			 1975
.
(p) Open-end
			 credit. A plan prescribing the terms of credit transactions which may be made
			 thereunder from time to time and under the terms of which a finance charge may
			 be charged from time to time on an outstanding unpaid balance.
(q) Person. An individual, a corporation, a
			 partnership, a limited partnership, an association, a joint-stock company, an
			 unincorporated organization, a limited liability company, or any similar entity
			 or any combination of the foregoing acting in concert.
(r) Superintendent. The Superintendent of
			 Banks of the Alabama State Banking Department.
Author:
Reyn Norman, Associate
				Counsel
Statutory Authority:
Code of Ala.
				  1975
, §
										27-2-17.