New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter VII - Credit And Creditor Insurance › Part 185 - Credit Life Insurance And Credit Accident And Health Insurance › Section 185.5 - Policy and certificate provisions and disclosure to debtors

Current through Register Vol. 46, No. 28, July 10, 2024
(a) No credit life
				insurance or credit accident and health insurance shall be effected on a debtor
				unless evidenced by an individual policy or, in the case of group insurance, by
				a certificate of group insurance, which policy or certificate shall be
				delivered to the debtor within 30 days from the time the indebtedness is
				incurred or the election to purchase insurance coverage is made. Within such
				30-day period, any cosigner or guarantor of the indebtedness shall be notified
				of the possible existence of this insurance by the use of a copy of the
				instrument of indebtedness, a copy of the loan application or a separate
				notice.
(b) If a separate charge is
				made to the debtor or debtors, then the signature of each debtor to be insured
				must be obtained requesting the coverage. However, in the case of married joint
				debtors, the insurer may allow one of the debtors to request joint coverage. If
				a debtor or debtors must satisfy an insurer's eligibility requirements for
				insurance including age, condition of health, employment status or other
				conditions for eligibility, the debtor's application for insurance, the notice
				of proposed group insurance, credit insurance disclosure statement or
				equivalent form shall set forth each such condition which would identify the
				debtor's eligibility or ineligibility and include a declaration for each debtor
				in regards to their eligibility. It is the responsibility of each insurer to
				ensure that every application, notice of proposed insurance, credit disclosure
				form and sales material provides an accurate description of the coverage
				provided in the policy and certificate and does not mislead the applicant as to
				the nature of the benefit.
(c) Each
				such individual policy or certificate of group insurance shall, in addition to
				other requirements of law, set forth:
(1) the
				name and home office address of the insurer;
(2) the identity of the debtor by name or
				otherwise;
(3) the amount and term
				of the coverage which, in the case of group insurance, may be by description
				rather than by stated amount and term;
(4) the amount of premium for an individual
				policy or the identifiable charge to the debtor, if any, under a group policy,
				stated separately in connection with credit life insurance, credit accident and
				health insurance and credit unemployment insurance when coverage is not
				packaged, unless in the case of group insurance, such identifiable charge has
				been disclosed to the debtor as hereinafter provided in subdivision (d) of this
				section;
(5) the circumstances and
				formula under which refunds of premiums or identifiable charges are payable
				pursuant to the provisions of section
				185.8 
				of this Part;
(6) a description of
				the insurance coverage, including any exceptions, limitations or
				restrictions;
(7) a description of
				the eligibility requirements for the insurance, as referred to in subdivision
				(b) of this section; and
(8) that
				the benefits shall be paid to the creditor to reduce or extinguish any unpaid
				net indebtedness to the creditor and, where the amount of insurance exceeds any
				such unpaid net indebtedness, that any such excess shall be payable to the
				debtor or to a designated beneficiary, other than the creditor, or, if none
				designated, to the estate of the debtor or pursuant to the provision of a
				facility of payment clause.
Any such certificate shall appropriately describe the refund
				  provision required pursuant to section
				  185.8 
				  of this Part. The insurer shall be responsible to ascertain that appropriate
				  procedures are set up by the creditor to implement the above. Where
				  appropriate, the insurer may pay any such excess directly to such beneficiary
				  or the estate of the debtor.