Illinois Administrative Code › Title 38 - FINANCIAL INSTITUTIONS › Part 110 - CONSUMER INSTALLMENT LOAN ACT › Subpart A - GENERAL PROVISIONS › Section 110.170 - Insurance and Other Products

Current through Register Vol. 48, No. 28, July 12, 2024
a)
				Licensees may provide insurances to the obligor provided the obligor has
				indicated in a specific, dated and separately signed statement that the obligor
				desires the insurance coverage. The purchase of any policy of insurance from or
				through the licensee shall not be a condition precedent to a loan. The
				insurance shall comply with the Illinois Insurance Code and all lawful
				requirements of the Director of the Department of Insurance related to that
				insurance.
b) The licensee may
				provide joint credit life or joint credit accident and health insurance if both
				insureds are obligated for the loan; however, this coverage shall not be a
				requirement precedent to the extension of credit.
c) When a loan is prepaid in full, the
				obligor shall receive a refund of the insurance charges. When the refund of any
				insurance premium is less than $1.00, no refund is
				required.
d) It shall be the
				licensee's responsibility to explain clearly to the obligor the benefits and
				limitations of any insurance requested in connection with any loan or loan
				extensions.
e) The licensee shall
				also deliver or cause to be delivered to the obligor a copy of the policy, or
				policies, certificate, or other evidence at the time the loan is made, and all
				obligors shall sign and receive a copy of a separate agreement clearly and
				conspicuously disclosing the limits of coverage.
f) No obligor shall be required to purchase
				any policy of insurance from any certain company, agent, broker, or person as a
				condition precedent to a loan. No licensee shall decline new or existing
				insurance that is approved by the Director of the Department of Insurance or
				prevent any obligor from obtaining the insurance from any other
				source.
g) When the loan is made,
				the insurance charges shall be computed for no more than the term of the loan
				contract on an amount that does not exceed the total amount required to pay the
				combined total of principal and interest charges.
h) The obligor's estate shall be paid the
				amount due between the unpaid balance and the insurance benefit paid. Evidence
				of this payment shall be maintained by the licensee.
i) In the case of a precomputed contract, the
				amount of the net unpaid balance shall be the unpaid balance of the note less
				any required rebate for prepayment in full on the date of the borrower's death,
				plus accrued but unpaid delinquency charges. In the case of an interest-bearing
				contract, the amount of the net unpaid balance shall be the principal balance
				plus accrued interest to the date of the borrower's death.
j) Account records shall indicate the date of
				death and the refunds of interest or loan charges and unearned insurance
				premiums paid to the estate. The refund check or voucher shall be available on
				demand.
k) Insurance against loss
				or damage to real or personal property given as security for a loan or
				liability arising out of ownership may be required of an obligor.
l) Property insurance provided by a licensee
				shall be consistent with the amount and term of the loan and shall not extend
				beyond the maturity of the loan unless the loan is delinquent when it may be
				extended 30 days beyond the original expiration date without charge to the
				obligor.
m) Upon cancellation of
				the loan by prepayment or refinancing, the obligor shall be entitled to a
				refund not less than the unearned insurance premium in any amount exceeding
				$1.00.
n) The licensee or affiliate
				may receive compensation for the sale of any insurance or debt cancellation
				contract or other such product purchased pursuant to the loan made or held by
				the licensee, provided the licensee discloses to the obligor that either the
				licensee or an affiliate may receive something of value in connection with the
				purchase by the obligor. This must be prominently disclosed in the loan
				contract.
o) In the event of a
				judgment prior to maturity, the judgment shall be decreased by the amount equal
				to any unearned insurance premium. Evidence of this decrease shall be
				maintained by the licensee.
p) If
				the Director has authorized a licensee to offer debt cancellation products,
				when a loan is prepaid in full, cancelled, renewed, refinanced, or reduced to
				judgment prior to maturity, the obligor shall be entitled to a refund of any
				unearned debt cancellation premium, calculated by the actuarial
				method.