Opinion ID: 1796802
Heading Depth: 1
Heading Rank: 4

Heading: the approximate amount and term of the credit

Text: Section 5-19-20 states: (a) With respect to any credit transaction, the creditor shall not require any insurance other than insurance against loss of or damage to any property in which the creditor is given a security interest and insurance insuring the lien of the creditor on the property which is collateral for said transaction. Credit life and disability and involuntary unemployment compensation insurance may be offered and, if accepted, may be provided by the creditor. The charge to the debtor for any such insurance shall not exceed the authorized premium permitted for such coverages. Insurance with respect to any credit transaction shall not exceed the approximate amount and term of the credit. The Banking Department determines the authorized premium permitted for such coverages. Department Regulation No. 28, § III(B) reads: The amount of Individual Credit Life Insurance written under one or more policies issued by the same lender shall not exceed the original face amount of the specific contracts of indebtedness in connection with which it is written; provided, however, that where the indebtedness is repayable in substantially equal installments, the amount of insurance shall never exceed the approximate unpaid balance of the loan. The plurality opinion states that the words approximate unpaid balance of the loan can mean only the principal owed, not including interest. The wording of the regulation does not explicitly refer to the principal amount of the loan only, in such a way that this Court should ignore the opinions of the responsible agencies. The common understanding of a person asked, How much do you have left to pay on your car loan? is that the answer would include principal and interest. I cannot imagine the McCullars subtracting out the interest when asked what they still owed on their car before this lawsuit was filed. Assuming there exists a conflict as to the meaning of this term, where should this Court turn for guidance? This Court should consult the administrative agencies responsible for overseeing this entire subject. The representative of the Insurance Department and the supervisor of the Bureau of Loans for the Banking Department state that their interpretation shows that Regency and Universal complied fully with the law and the regulation. That is how their agencies have interpreted the statute and the regulation for years. Notice that § 5-19-20(a) makes no distinction between credit life insurance and credit disability insurance, which the plaintiffs have conceded should be treated differently from credit life insurance. The plaintiffs admit that issuers of credit disability insurance may use the total of payments to determine the amount of insurance. Yet that statute uses the same terminology for both types of credit insurance to define the limit upon the amount of insurance allowedapproximate amount and term of the credit. The legislature has shown by its application of the same phrase to each type of credit insurance that it makes no distinction between the amount that may be allowed for credit disability insurance versus credit life insurance. If the legislature had intended that the two types of insurance be treated differently, certainly it would have used different language for each type. Even if we decided that the statute and the regulation are unclear and that this Court must supply the meaning, should we allow the defendants to be charged with liability because they adhered to their understanding and the state agencies' understanding of the meaning of the terms involved? We would not allow a criminal defendant to be charged with a crime based on a vague statute, which a court could interpret in any fashion it pleased. Why are automobile dealerships and insurance companies afforded less protection than criminal defendants?