Ala. Admin. Code r. 482-1-117-.04

Current through Register Vol. 43, No. 1, October 31, 2024

Section 482-1-117-.04 - Definitions

The following definitions shall apply for purposes of this chapter:

(a) Affiliate. As defined in Section 27-29-1, Code of Ala. 1975.

(b) Closed-end credit. A credit transaction that does not meet the definition of open-end credit.

(c) Commissioner. The Alabama Commissioner of Insurance.

(d) Compensation. Commissions, dividends, retrospective rate credits, service fees, expense allowances or reimbursements, gifts, furnishing of equipment, facilities, goods or services, or any other form of remuneration resulting directly from the sale of consumer credit insurance.

(e) Consumer credit insurance. Refers to "credit life insurance" and "credit disability insurance" as defined in this rule.

(f) Control. As defined in Section 27-29-1, Code of Ala. 1975.

(g) Credit disability insurance. Insurance on a debtor or debtors to provide indemnity for payments or debt becoming due on a specific credit transaction, in whole or in part, while the debtor is disabled as defined in the policy, and which precludes debtor selection of primary beneficiary.

(h) Credit life insurance. Insurance on a debtor or debtors, in connection with a specific credit transaction, to provide for satisfaction of a debt, in whole or in part, upon the death of an insured debtor, and which precludes debtor selection as to primary beneficiary.

(i) Credit transaction. Any transaction by the terms of which the repayment of money loaned or loan commitment made, or payment for goods, services or properties sold or leased, is to be made at a future date or dates. It is acknowledged that the Alabama Consumer Credit Act does not apply to true leases; however, it is intended that consumer credit insurance issued or sold in connection with true leases be subject to this chapter to the extent provided herein.

(j) Creditor. A person who regularly extends or arranges for the extension of credit for which the payment of a finance charge is required, whether in connection with loans, sales of property or services, or otherwise, and, for purposes of this chapter, "creditor" also includes a lessor, and any successor of the foregoing.

(k) Debtor. A borrower of money or a purchaser or lessee of goods, services, property, rights or privileges for which payment is arranged through a credit transaction.

(l) Evidence of individual insurability. A statement furnished by the debtor, as a condition of insurance becoming effective, that relates specifically to the health status or to the health or medical history of the debtor, or to the occupation of the insured debtor or other information related to the insured debtor. This definition specifically excludes information related to the eligibility of the debtor for coverage.

(m) Gross debt. The sum of the remaining payments, including principal, interest, and other lawful charges, owed to the creditor by the debtor. For leases, "gross debt" means the sum of the remaining lease payments plus any residual payments, whether optional or mandatory.

(n) Identifiable charge. A charge for a type of consumer credit insurance that is made to insured debtors and not made to uninsured debtors; it includes a charge for insurance that is disclosed in the credit or other instrument furnished to the debtor which sets out the financial elements of the credit transaction and any difference in the finance, interest, service or other similar charge made to debtors who are in like circumstances except for the insured or non-insured status of the debtor or the insured or non-insured status of the property used as security for the credit transaction.

(o) Insurer. As defined in Section 27-1-2, Code of Ala. 1975.

(p) Open-end credit. A plan prescribing the terms of credit transactions which may be made thereunder from time to time and under the terms of which a finance charge may be charged from time to time on an outstanding unpaid balance.

(q) Person. An individual, a corporation, a partnership, a limited partnership, an association, a joint-stock company, an unincorporated organization, a limited liability company, or any similar entity or any combination of the foregoing acting in concert.

(r) Superintendent. The Superintendent of Banks of the Alabama State Banking Department.

Author: Reyn Norman, Associate Counsel

Ala. Admin. Code r. 482-1-117-.04

New Rule: October 14, 1999; effective November 1, 1999. Filed for codification in the Alabama Administrative Code by the Department of Insurance on January 17, 2003, pursuant to the Code of Ala. 1975, § 27-7-43.

Statutory Authority:Code of Ala. 1975, § 27-2-17.