New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 2 - INSURANCE GROUP › Subchapter 3 - CREDIT LIFE INSURANCE AND CREDIT ACCIDENT AND HEALTH INSURANCE › Section 11:2-3.20 - Refunds

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Each individual policy or group certificate of credit life insurance and credit accident and health insurance for which a payment is collected from the debtor shall provide that, in the event of termination of the insurance prior to the scheduled maturity date of the indebtedness, any refund due of premium or of an amount collected from the debtor for insurance shall be paid or credited promptly, but in no event later than 60 days from such termination, to the insured debtor.
(b) If a creditor collects a payment from a debtor for credit life insurance and credit accident and health insurance and such insurance does not become effective, the creditor shall immediately give written notice to such debtor and shall promptly, but in no event later than 60 days from such notice, refund to or credit to the account of the debtor the amount collected from him for such insurance.
(c) The filing requirement set forth in 11:2-3.1 4 will be considered satisfied if such refund formulas are set forth in the individual policy or certificate of group insurance filed for the coverages to which such refund formulas relate and the filing of said forms has been acknowledged and not disapproved by the Commissioner.
(d) For credit life insurance issued on a gross basis and for credit accident and health insurance, the refund formula designated as the "sum of digits" formula and more commonly known as the "Rule of 78" is acceptable. For credit life insurance issued on a net basis, the refund formula shall be an exact actuarial formula based on the amount of net coverage and shall be set out in the individual policy or group certificate and filed with the Commissioner for approval. The Rule of 78 is not an acceptable refund formula for credit life insurance issued on a net basis. Nothing in this subsection shall preclude insurers from filing other refund formulas which produce a just, fair and equitable result.
(e) When credit involuntary unemployment insurance is included in the combined coverages and the debtor notifies the insurer in writing that he or she is or has become ineligible for credit involuntary unemployment insurance coverage by reason of being or becoming voluntarily unemployed, or by reason of being or becoming self-employed, and states the date on which that ineligibility commenced, or a claim is denied under the credit involuntary unemployment insurance coverage because the debtor became ineligible for that coverage, the insurer shall promptly, but in no event later than 60 days from the date of notice by the policyholder or denial of the claim, as applicable, remit a refund of the portion of the premium applicable to the credit involuntary unemployment insurance coverage during the period of ineligibility.
(f) In no event need a refund or credit be made if the amount thereof is less than $1.00.
(g) An insurer shall promptly, but in no event later than 60 days from termination of coverage, refund to an individual policyholder and refund or credit to a group policyholder any refund of premium due on termination of insurance prior to the scheduled maturity date of the indebtedness, and a group policyholder or creditor shall promptly, but in no event later than 60 days from date of receipt of the refund or credit from the insurer, refund or credit to the debtor any refund due pursuant to this section.