Iowa Administrative Code › Agency 191 - Insurance Division › Property and Casualty Insurance › Chapter 28 - Credit Life and Credit Accident and Health Insurance › Rule 191-28.3 - Rights and Treatment of Debtors

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Multiple plans of insurance.
If a creditor has available to
				the debtors more than one plan of credit life insurance or more than one plan
				of credit accident and health insurance, the debtors must be informed of all
				plans applicable to the credit transaction. All relevant plans shall be fully
				disclosed to the consumer prior to the preparation of any insurance documents
				and before the consumer becomes obligated on the credit transaction.
(2)
Substitution.
When a
				creditor requires credit life insurance, credit accident and health insurance,
				or both, as additional security for an indebtedness, the debtor shall be given
				the option of furnishing the required amount of insurance through existing
				policies of insurance owned or controlled by the debtor or by procuring and
				furnishing the required coverage through any insurer authorized to transact
				insurance business in this state. If this subrule is applicable, the debtor
				shall be informed by the creditor of the right to provide alternative coverage
				before the transaction is completed.
(3)
Evidence of coverage.
a. All credit insurance shall be evidenced by
				an individual policy, or, in the case of group insurance, by a certificate of
				insurance, which individual policy or group certificate of insurance shall be
				delivered to the debtor at the time the indebtedness is incurred, except as
				provided in the following. If the individual policy or group certificate of
				insurance is not delivered to the debtor at the time the indebtedness is
				incurred, a copy of the application for the policy or a notice of proposed
				insurance shall be delivered to the debtor at the time the indebtedness is
				incurred. Upon acceptance of the insurance by the insurer and within 30 days of
				the date upon which the indebtedness is incurred, the insurer shall cause the
				individual policy or group certificate of insurance to be delivered to the
				debtor.
b. Each individual policy
				or group certificate of credit insurance delivered or issued for delivery in
				this state shall, in addition to the other requirements of law, set forth:
(1) The name and home office address of the
				insurer and, on group certificates, an identification of the master
				policy;
(2) The identity of the
				insured debtor by name or any other reasonable alternative method of
				identification approved by the insurance commissioner;
(3) The amount of premium or identifiable
				insurance charge to the debtor, separately for the credit life insurance and
				credit accident and health insurance;
(4) A description of the coverage including
				the amount and term thereof;
(5)
				Any exceptions, limitations and restrictions;
(6) A statement that the benefits will be
				paid to the creditor to reduce or extinguish the indebtedness, and any excess
				shall be paid to a beneficiary, other than the creditor, named by the debtor or
				to the debtor's estate.
c. A policy, certificate of credit insurance
				or notice of proposed insurance shall not contain provisions which would
				encourage misrepresentation or which are unjust, unfair, inequitable,
				misleading, deceptive or contrary to law or to the public policy of this
				state.
d. A credit life insurance
				or credit accident and health insurance policy violates
				paragraph
"c"
if it provides an amount of insurance less than
				the amount necessary to discharge the indebtedness, when it does not set forth
				clearly the information on the insured debtor's policy or certificate in not
				less than 10-point bold-faced type or in some other prominent method approved
				by the commissioner.
e. A notice of
				proposed insurance or a copy of the application for the policy, when delivered
				pursuant to paragraph
"a"
as evidence of coverage, violates
				paragraph
"c"
above, if it does not set forth the name and home
				office of the insurer; the name or names of the debtor; the premium or amount
				of payment by the debtor, separately for credit life or credit accident and
				health insurance; the amount, term and a brief description of the coverage
				provided. The copy of the application for, or notice of proposed insurance,
				shall also refer exclusively to insurance 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 subrule is prominently
				disclosed.
f. If an insurer other
				than the insurer named on the application, notice of proposed insurance, policy
				or certificate of insurance accepts the risk, the debtor shall receive a new
				policy or certificate of insurance setting forth the name and home office
				address of the substituted insurer and the amount of the premium to be charged
				and, if the amount of the new premium is less, an appropriate refund shall be
				made.
g. If an insured debtor
				states that the debtor is under the maximum age for insurance, but is not, the
				insurer shall return the premium when this is discovered and no benefit will be
				paid.
h. If the insurer accepts
				premiums where the debtor has correctly stated the debtor's age, insurance
				coverage shall be effective regardless of age limitations or age exclusions
				unless a premium refund is made within 30 days following the date the
				application or notice of proposed insurance is received by the
				insurer.
i. No statements made by a
				debtor shall be used by an insurer as a basis for denying a claim unless the
				statement is contained in a written application for insurance signed by the
				debtor, a copy of which is or has been furnished to the debtor or to the
				debtor's beneficiary, and the form of which has been filed with and approved by
				the insurance commissioner for use in connection with the policy form in
				question.
j. An application must
				identify the insurer providing the coverage. An application signed by the
				debtor is required whenever the policy contains an exclusion on account of age
				or other eligibility requirement.