Ala. Admin. Code r. 482-1-117-.05

Current through Register Vol. 42, No. 11, August 30, 2024

Section 482-1-117-.05 - Types Of Consumer Credit Insurance

(1) The types of consumer credit insurance defined in Rule 482-1-117-.04 may each be written separately, jointly, or in combination with other types of credit insurance on an individual policy or group policy basis, whether or not the other types of credit insurance are subject to this chapter.

(2) There are two categories of credit life insurance:

(a) Group Credit Life Insurance. A policy of credit life insurance issued to a creditor, who shall be deemed the policyholder, to insure debtors of the creditor, subject to the following requirements:

1. The debtors eligible for insurance under the policy shall be all of the debtors of the creditor or all of any class or classes thereof. The policy may provide that the term "debtors" shall include the debtors of one or more affiliates.

2. The premium for the policy shall be paid by the policyholder, either from the creditor's funds or from charges collected from the insured debtors, or from both.

3. A policy may reserve to the insurer the right to require evidence of individual insurability.

4. The insurance shall be payable to the policyholder. Such payment shall reduce or extinguish the unpaid indebtedness of the debtor to the extent of such payment.

(b) Individual Credit Life Insurance. A policy of credit life insurance issued to a debtor in favor of a creditor.

(3) There are two categories of credit disability insurance:

(a) Group Credit Disability Insurance. A policy of credit disability insurance issued to a creditor, who shall be deemed to be the policyholder, to insure debtors of the creditor, subject to the following requirements:

1. The debtors eligible for such insurance under the policy shall be all of the debtors of the creditor, or all of any class or classes thereof. The policy may provide that the term "debtors" shall include the debtors of one or more affiliates.

2. The policy may reserve to the insurer the right to require evidence of individual insurability.

(b) Individual Credit Disability Insurance. A policy of credit disability insurance issued to a debtor in favor of a creditor.

Author: Reyn Norman, Associate Counsel

Ala. Admin. Code r. 482-1-117-.05

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.