Rhode Island Code of Regulations › Title 230 - Department of Business Regulation › Chapter 20 - Insurance › Subchapter 60 - Miscellaneous › Part 1 - Consumer Credit Insurance (230-RICR-20-60-1) › Section 230-RICR-20-60-1.3 - Rights and Treatment of Debtors

Current through June 14, 2024
A. Multiple Plans
				  of Insurance. If a creditor makes available to the debtors more than one plan
				  of consumer credit life insurance every debtor must be informed of each plan
				  for which the debtor is eligible and of the premium or insurance charge for
				  each.
B. Substitution. When a
				  creditor requires insurance as additional security for a debt, 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 of
				  procuring and furnishing the required coverage through any insurer authorized
				  to transact insurance business in this state. If this subsection is applicable,
				  the debtor shall be informed by the creditor of the right to provide
				  alternative coverage before the transaction is completed.
C. Termination of group consumer credit
				  insurance policy.
1. If a debtor is covered
				  by a group consumer credit insurance policy providing for the payment of single
				  premiums to the insurer, or any other premium payment method which prepays
				  coverage beyond one month, then provision shall be made by the insurer that in
				  the event of termination of the policy for any reason, insurance coverage with
				  respect to any debtor insured under such policy shall be continued for the
				  entire period for which the single premium has been paid.
2. If a debtor is covered by a group consumer
				  credit insurance policy providing for the payment of premiums to the insurer on
				  a monthly basis, then the policy shall provide that, in the event of
				  termination of such policy, termination notice shall be given to the insured
				  debtor at least thirty (30) days prior to the effective date of termination
				  except where replacement of the coverage by the same or another insurer in the
				  same or greater amount takes place without lapse of coverage. The insurer shall
				  provide or cause to be provided this required information to the
				  debtor.
3. Remittance on Premiums.
				  If the creditor adds identifiable insurance charges or premiums for consumer
				  credit insurance to the debt, and any direct or indirect finance, carrying,
				  credit, or service charge is made to the debtor on such insurance charges or
				  premiums, the creditor must remit and the insurer shall collect the premium
				  within sixty (60) days after it is added to the debt.
4. Refinancing of the Debt. If the debt is
				  discharged due to refinancing prior to scheduled maturity, the insurance in
				  force shall be terminated before any new insurance may be issued in connection
				  with the refinanced debt. In all cases of termination prior to scheduled
				  maturity, a refund of all unearned premium or unearned insurance charges paid
				  by the debtor shall be paid or credited to the debtor as provided in §
											1.9    of this Part. In any refinancing of the debt, the effective date of coverage as
				  respects any policy provision shall be deemed to be the first date on which the
				  debtor became insured under the policy with respect to the debt which was
				  refinanced, at least to the extent of the amount and term of the debt
				  outstanding at the time of refinancing of the debt.
5. Maximum Aggregate Provisions. A provision
				  in an individual policy or group certificate that sets a maximum limit on total
				  claim payments must apply only to that individual policy or group
				  certificate.
6. Prepayment of Debt.
				  If a debtor prepays the debt in full then any consumer credit insurance
				  covering the debt shall be terminated and an appropriate refund of the consumer
				  credit insurance premium shall be paid or credited to the debtor in accordance
				  with §
											1.9   of this Part. However, if the prepayment is a result of death or
				  any other lump sum consumer credit insurance payment, no refund shall be
				  required for the coverage under which the lump sum was paid. If a claim under
				  credit accident and health coverage or credit unemployment coverage is in
				  progress at the time of prepayment, the amount of refund may be determined as
				  if the prepayment did not occur until the payment of benefits terminates. No
				  refund need be paid during any period of disability for which credit accident
				  and health benefits are payable or during any period of unemployment for which
				  credit unemployment benefits are payable A refund shall be computed as if
				  prepayment occurred at the end of the disability period or at the end of the
				  unemployment period.
7. If a
				  creditor has opened a line of credit for a debtor and, under R.I. Gen. Laws
				  §§
											27-30-4(a)(5) or
				  (6), is charging for this line of credit
				  rather than the amount of debt in the event of the death of the debtor, the
				  insured amount due is the amount of the established amount of credit against
				  which premium was last charged.