West Virginia Code of State Rules › Agency 114 - Insurance Commission › Title 114 - LEGISLATIVE RULE INSURANCE COMMISSIONER › Series 114-07 - Premium Financing Of Life Insurance For College Students › Section 114-7-2 - Financing Arrangement

Current through Register Vol. XLI, No. 28, July 12, 2024
2.1. Financing
				agreement. -- If the insured is a minor and executes a promissory note in connection
				with the first year's premium, such note must be witnessed or acknowledged by at
				least one of the insured's parents or his guardian. It is not the intent of this
				section to enlarge the rights or duties of a minor as found in the statutory and
				common law of West Virginia, including, but not limited to, the provisions of
				section four, article six, chapter thirty-three of the West Virginia Code of 1931,
				as amended.
2.2. Disclosure in
				application-Down payment. -- The giving of a promissory note in connection with the
				first premium must be set out in the application over the applicant's signature,
				showing the amount of the note and the amount of the down payment made to an agent
				at the time of sale. A down payment in cash of at least ten dollars ($10.00) must be
				paid at the time the application is signed.
2.3. Down payment-Unfair practices. -- The down
				payment must be paid by the applicant in cash and any payment made, directly or
				indirectly, by the agent to or for the benefit of the applicant in connection with
				the sale shall be presumed to be an illegal rebate or inducement.
2.4. Same-Limitation on amount. -- If a note is
				taken to finance less than the first year's premium, the balance must be paid in
				cash by the applicant at the time the application is taken, except that such balance
				shall not be less than ten dollars ($10.00). The maximum amount of any premium
				financing arrangement which may be entered into shall be in accordance with
				reasonable and sound underwriting practices as determined by the insurer. A premium
				financing arrangement whereby an applicant becomes indebted in an amount sufficient
				to finance the first annual premium, exclusive of interest, shall be deemed prima
				facie in accordance with reasonable and sound underwriting practices. A financed
				program should not be sold to a undergraduate student on a basis where premiums
				would come due less than ninety (90) days after the anticipated date of graduation
				of said student.
2.5. Note and
				assignment attached to policy. -- A copy of the note and any assignment must be
				attached to the policy.
2.6. When note
				becomes payable. -- The maturity date of any promissory note payable in one lump sum
				at maturity, or the maturity date of any installment type note which provided for a
				"Balloon" payment, should not be less than ninety (90) days after the anticipated
				graduation date of the applicant:
Provided,
That any such note may
				contain an acceleration clause to become operable not less than thirty-one (31) days
				after default in the payment of any renewal premium. The obligation evidenced by a
				promissory note may be satisfied in advance of the maturity date without
				penalty.