Michigan Administrative Code › Department - Insurance and Financial Services › Insurance › Credit Insurance Rates, Forms, And Standards › Section R. 550.202 - Policy or certificate content; acceptable language for notice of proposed insurance; open-end credit insurance; delivery, effective date, duration, issuance, amounts, and annual notice of continuation

Current through Vol. 24-12, July 15, 2024
Rule 2.
(1) Each
				individual policy or certificate of insurance shall set forth the information
				that is required by section 9 of the act.
(2) If a notice of proposed insurance is used
				pursuant to section 11 of the act, the following is acceptable language for
				such notice:
The front of this contract is marked to show if credit
				  insurance applies to it. As shown by the marking, one or two kinds may apply.
				  One is group credit life insurance. The other is group credit accident and
				  health insurance. The insurer is named on this notice. The insurer may accept
				  or reject the insurance. The insurance covers only those who sign the request
				  for insurance. The charge is shown for each type of insurance to be bought. The
				  term of insurance will begin on the date the debt begins. It will end on the
				  date the debt is first set to end. If the insurer accepts the insurance, the
				  insured will receive a certificate of insurance within 30 days. This will more
				  fully describe the insurance. It will state any limits on coverage. If the debt
				  is prepaid, a refund of the insurance charges will be made when due.
Any notice of proposed insurance given to a debtor shall be
				  as complete as the notice provided in this subrule.
(3) When open-end credit insurance is
				provided, an individual policy, a certificate, or a notice of proposed
				insurance need only be delivered once for each account. Under open-end credit
				insurance, the effective date of the credit insurance policy or certificate is
				the date on which the debtor establishes the account and agrees to pay the
				required insurance charge, if any. Unless terminated earlier according to its
				terms, the open-end credit insurance shall remain in force until the account is
				cancelled. An individual policy, a certificate, or a notice of proposed
				insurance need not be issued each time the account is debited. This credit
				insurance is provided on the outstanding balance of the indebtedness; if no
				indebtedness exists, the insurance amount is zero and remains so until the
				account is debited. The creditor shall send an annual notice regarding the
				continuation of insurance to all account holders whose accounts have a zero
				balance. The notice shall explain how an account holder may cancel the credit
				insurance.
(4) When open-end credit
				insurance is provided, and where the policy contains a preexisting conditions
				exclusion permitted by the provisions of subrule 11(5) or subrule 12(2) of
				these rules, an insurer may apply a preexisting conditions exclusion to each
				advance under the open-end credit account. In applying this rule, all past and
				current payments made on the account by the debtor and insurer shall be applied
				to the earliest outstanding advances.
(5) If an insurer underwrites, then all the
				following provisions shall apply:
(a) All
				information from applicants shall be obtained through questions contained in
				the application form, which shall not be in the loan agreement.
(b) Questions shall be clear and unambiguous.
				So far as possible, questions shall be designed to elicit a yes or no
				answer.
(c) Questions to applicants
				shall be based upon objective matters, such as the diagnosis or treatment of
				medical conditions. Questions shall not be based upon an applicant's subjective
				judgment of health conditions.