Pennsylvania Code › Title 31 - INSURANCE › Part III - Credit Insurance › Chapter 73 - CREDIT LIFE INSURANCE AND CREDIT ACCIDENT AND HEALTH INSURANCE › Section 73.140 - Credit insurance on closed end variable interest loans

Current through Register Vol. 54, No. 28, July 13, 2024
(a)
General
				requirements
. Credit insurance may be provided in connection with
				closed end variable interest loans. This section supersedes other provisions of
				this chapter to the extent that the provisions would otherwise relate to credit
				insurance on closed end variable interest loans.
(b)
Identification
. A credit
				insurance program designed for use with closed end variable interest loans
				shall be identified as such when filed with the Department in accordance with
				§
									73.136 (relating to filing of
				forms and rates).
(c)
Disclosure
. If premiums are payable on a single premium basis
				and life insurance coverage is provided, the individual policy or group
				certificate shall contain a disclosure that the insurance benefit may end prior
				to the maturity date of the loan. If premiums are payable on a single premium
				basis and A and H, involuntary unemployment or voluntary unemployment insurance
				coverage is provided, the individual policy or group certificate shall contain
				a disclosure that the insurance benefits may not be sufficient to pay the
				entire amount of the periodic loan payment or may end prior to the maturity
				date of the loan. The disclosure shall appear in prominent type on the first
				page of the individual policy or group certificate.
(d)
Benefit amount
. Subject
				to any policy limitations, if premiums are payable on a single premium basis,
				the monthly A and H insurance benefit and the involuntary unemployment
				insurance benefit shall equal the amount of the original monthly installment
				payment. Subject to any policy limitations, if premiums are payable on a
				monthly outstanding balance basis, the monthly A and H and involuntary
				unemployment insurance benefits shall equal the amount of the monthly
				installment payment amount on the day disability or unemployment
				began.
(e)
Coverage
				term
. If premiums are payable on a single premium basis, the term of
				the insurance shall extend until the original scheduled maturity date of the
				indebtedness, unless coverage terminates earlier in accordance with the policy
				or certificate provisions. If the term of the insurance extends to the original
				scheduled maturity date of the indebtedness, it may be extended for an
				additional 2 months to cover delinquencies or extensions due to increased
				interest rates. If premiums are payable on a monthly basis, the term of the
				insurance shall extend until the loan is repaid, unless coverage terminates
				earlier in accordance with the policy or certificate provisions.
(f)
Refund
. A refund of any
				unearned premiums shall be made as provided in §
									73.127 (relating to refunds) if
				the indebtedness is prepaid prior to the original scheduled maturity date of
				the indebtedness as a result of a decline in interest rates. The refund shall
				be based on the term and interest rate applicable at the inception of the loan
				and the actual elapsed term.
(g)
Premium determination
. If premiums are payable on a single
				premium basis, the premium shall be based on the expected amount and term of
				coverage, in consideration of the amount financed, the expected loan term and
				the interest rate applicable to the loan at the time the insurance is
				elected.
This section cited in 31 Pa. Code §
											73.107 (relating to accident and
					 health insurance benefits); and 31 Pa. Code §
											73.110 (relating to involuntary
					 unemployment insurance benefits).