Pennsylvania Code › Title 31 - INSURANCE › Part III - Credit Insurance › Chapter 73 - CREDIT LIFE INSURANCE AND CREDIT ACCIDENT AND HEALTH INSURANCE › Section 73.103 - Definitions

Current through Register Vol. 54, No. 28, July 13, 2024
The following words and terms, when used in this chapter,
				  have the following meanings, unless the context clearly indicates
				  otherwise:
A and H
-Accident and health
				  insurance.
Account
-The coverage for a single line of
				  insurance offered to a single type of business by one creditor. The term
				  includes coverage written on a group or individual policy.
Act
-The Model Act for the Regulation of
				  Credit Life Insurance and Credit Accident and Health Insurance (40 P. S.
				  §§
										1007.1-1007.15).
Agent
-A person defined in section 601 of The
				  Insurance Department Act of 1921 (40 P. S. §
										231).
Amount financed
-The amount on which interest
				  charges are calculated.
Amount of level lease insurance
-In
				  connection with a lease transaction, the amount of death benefit equal to the
				  residual payment, plus any applicable taxes on the residual payment.
Balloon amount
-The excess of the final
				  payment on a balloon loan over the amount of one periodic installment
				  payment.
Balloon loan
-A loan which provides for
				  periodic installment payments of a stated amount during the term of the
				  indebtedness and for a final payment at the end of the term of the indebtedness
				  which is substantially more than the amount of one periodic installment payment
				  and less than the initial net unpaid indebtedness.
Broker
-A person defined in section 621 of
				  The Insurance Department Act of 1921 (40 P. S. §
										251).
Closed end loan
-Indebtedness which is not an
				  open end loan or a lease.
Commissioner
-The Insurance Commissioner of
				  the Commonwealth.
Composite term period
-The installment
				  periods for which composite term premium rates will be charged.
Composite term premium rate
-Premium rates
				  which do not vary based on the number of monthly installments and which meet
				  the requirements of §
									73.120 (relating to composite term
				  premium rate).
Contributory insurance
-Insurance for which
				  the debtor is charged an identifiable charge.
Credit accident and health
				  insurance
-Insurance as defined in section 2(b)(2) of the act
				  (40
				  P. S. §
										1007.2(b)(2)).
Credit instrument
-A loan or sales instrument
				  or agreement.
Credit insurance
-Insurance subject to the
				  act and section 641 of The Insurance Department Act of 1921 (40 P. S. §
										281).
Credit involuntary unemployment
				  insurance
-Credit unemployment insurance paid in the event of the
				  debtor's unemployment due to no choice of the debtor.
Credit life insurance
-Insurance as defined
				  in section 2(b)(1) of the act.
Credit life insurance with TPD
-Insurance on
				  the life of a debtor paid under or in connection with a specific loan or other
				  credit transaction in the event of the debtor's death or total and permanent
				  disability.
Credit unemployment insurance
-Insurance on a
				  debtor to provide indemnity for payments becoming due on a specific loan or
				  other credit transaction while the debtor is unemployed as defined in the group
				  certificate or individual policy.
Credit voluntary unemployment
				  insurance
-Credit unemployment insurance paid in the event of the
				  debtor's unemployment due to a choice made by the debtor.
Creditor
-As defined in section 2(b)(3) of
				  the act.
Debtor
-As defined in section 2(b)(4) of the
				  act.
Decreasing term lease insurance amount
-The
				  amount required to liquidate the lease obligation excluding the amount of any
				  monthly lease payments paid at the beginning of a lease and excluding the
				  residual value.
Department
-The Insurance Department of the
				  Commonwealth.
Electronic rate book
-An electronic data
				  system programmed and used solely for the calculation and computation of
				  installment loans and calculation and computation of insurance amount, premium
				  rates and refunds.
Excess benefits
-The portion of the insurance
				  benefit that exceeds the outstanding indebtedness.
Fixed residual value financing
-The manner of
				  financing a motor vehicle purchase whereby a buyer, who is listed as the owner
				  on the title of a motor vehicle, agrees to select and perform one of the
				  following options, at the conclusion of a predetermined schedule of installment
				  payments made in substantially equal periods and in substantially equal
				  amounts:
(i) Satisfying the balance of
				the contractual amount owing.
(ii)
				Refinancing any balance owing on the terms previously agreed upon at the
				original execution of the installment sales contract.
(iii) Surrendering the motor vehicle as
				agreed upon at the original execution of the installment sale
				contract.
Full benefit period coverage
-Insurance
				  coverage which provides protection for a benefit period equal to the shorter of
				  the duration of disability or unemployment minus any elimination period and the
				  full term of coverage remaining when the disability or unemployment benefits
				  first become payable.
Full term insurance coverage
-Insurance
				  coverage for a benefit period equal to the term of the indebtedness remaining
				  at the time coverage is elected.
Grace period
-The period during which a
				  premium may be paid after the premium due date.
Identifiable charge
-The amount a creditor
				  charges a debtor specifically for credit insurance. A differential in finance,
				  interest, service or similar charges made to debtors who are in like
				  circumstances, except for their insured or noninsured status, is considered an
				  identifiable charge.
Indebtedness
-The total amount payable by a
				  debtor to a creditor in connection with a loan or other credit
				  transaction.
(i)
Actual gross
				unpaid indebtedness
. The scheduled gross unpaid indebtedness plus any
				past-due installment payments and minus any prepaid installment
				payments.
(ii)
Actual net
				unpaid indebtedness
. The amount necessary to liquidate the actual
				unpaid indebtedness in a single sum excluding unearned interest, but including
				any prepayment penalty.
(iii)
Initial insured indebtedness
.
(A) If coverage is provided on a gross
				indebtedness basis, the sum of the installment payments under the contract of
				indebtedness as of the date the indebtedness is incurred, subject to any
				maximum dollar amount of coverage specified in the group policy and group
				certificate or individual policy.
(B) If coverage is provided on a net
				indebtedness basis, the amount of the indebtedness excluding the unearned
				interest under the contract of indebtedness as of the date the indebtedness is
				incurred, subject to any maximum dollar amount of coverage specified in the
				group policy and group certificate or individual policy.