Section 40.902 - Limitations on Refinance of Loans Covered by Credit Insurance(a) During any period when a borrower is disabled, and the disability is, or will become upon completion of the waiting period provided for in the policy, compensable under an existing policy of credit disability insurance, there may be no renewal or refinancing of the borrower's existing loan.(b) If, with respect to any program for the sale of credit disability insurance, either (1) the policy excludes from coverage those disabilities arising out of injuries or illnesses existing on or before the effective date of insurance; or (2) the policies offered in connection with the renewal of refinancing of loans contain any terms or conditions which are different (other than as to the amount and term of coverage occasioned by the renewal or refinancing) from the terms or conditions of the policy relating to the loan being renewed or refinanced; then, prior to any renewal or refinancing of the borrower's existing loan, a written notice shall be given to the borrower by the industrial loan company, advising the borrower as to either or both of the following, whichever may be applicable:(1) That if the borrower's loan is renewed or refinanced, the borrower will not be entitled to benefits for any disability resulting from any accident or illness which occurred subsequent to the date of the borrower's existing loan but prior to the date of the renewal or refinancing, even though credit disability insurance may again be provided for in connection with the renewal or refinancing.(2) If the loan is renewed or refinanced, and a new policy of credit disability insurance is provided, the borrower's right to recover will be limited to the coverage provided by the new policy, which is different from that under which the borrower had been previously insured. The notice shall explain the substance of the differences.(c) When a loan is insured by a policy of credit life insurance, the loan may not be renewed or refinanced without credit life insurance of substantially the same coverage being offered to the borrower in connection with the renewal or refinancing, unless, prior thereto, a written notice, is given to the borrower by the industrial loan company. The notice shall inform the borrower that in the event of renewal or refinancing the borrower's right to credit life insurance will terminate and the borrower will no longer be entitled to the credit life insurance benefits which had been in effect with respect to the borrower's existing loan.Cal. Code Regs. Tit. 10, § 40.902
1. Change without regulatory effect renumbering former section 1203 to new section 40.902 filed 8-19-97 pursuant to section 100, title 1, California Code of Regulations (Register 97, No. 34). Note: Authority cited: Section 18347, Financial Code. Reference Sections 18290 and 18358, Financial Code.
1. Change without regulatory effect renumbering former section 1203 to new section 40.902 filed 8-19-97 pursuant to section 100, title 1, California Code of Regulations (Register 97, No. 34).