4 Colo. Code Regs. § 902-1-4
Current through Register Vol. 47, No. 16, August 25, 2024
Rule 4 CCR 902-1-4 - Permissible Additional Charges - Involuntary Unemployment Insurance Premiums(a) Pursuant to § 5-2-202(1)(d), C.R.S., the administrator finds that involuntary unemployment insurance sold in conformity with the provisions of this rule is a benefit to the borrower and that the charges are reasonable in relation to the benefits and are not of a type for credit.(b) Premiums for involuntary unemployment insurance are permissible additional charges if all of the following conditions are met fully:1. The insurance coverage is not a factor in the extension of credit and this fact is clearly disclosed in writing to the consumer.2. The premium for the initial term of insurance coverage is disclosed. If the term of insurance is less than the term of the transaction, the term of insurance also shall be disclosed. The premium may be disclosed on a unit-cost basis only in revolving credit transactions.3. The number of installment or other payments payable by the insurance covering the consumer and any limitation on the amount of such payments are disclosed clearly in writing to the consumer.4. The creditor secures that consumer's consent for a specific amount and cost of insurance if sold by the creditor before inclusion of the insurance premium in any quoted installment or other payment or in any document prepared for closing. In order to obtain the insurance the consumer gives specific written affirmative indication of the consumer's desire to purchase the insurance after receiving the disclosures specified in this rule.5. The insurance policy allows the insured consumer to cancel the policy within thirty (30) days with a refund of all of the premiums and without cost, and to cancel the policy at any time thereafter with a refund of unearned premiums, and the insured receives written disclosure of these facts.6. If the insured does cancel the policy the premium refund is returned directly to the consumer or credited to the consumer's account as a partial prepayment of the indebtedness.7. The sale of the insurance fully complies with all federal and Colorado laws and regulations concerning consumer credit insurance, including without limitation parts 1 and 2, article 4, title 5, C.R.S.8. The consumer receives written disclosure of the length of any deductible period before the insurance benefits are payable and whether the benefits are retroactive to the commencement of involuntary unemployment.9. The creditor makes a prompt refund to the consumer of all applicable finance charges calculated according to the actuarial method based upon the refunded premiums and the terms of the transaction if the creditor financed the premiums in a precomputed transaction, the consumer cancels the insurance, and the creditor refunds the premiums by credit to the consumer's account.10. In the event the creditor sells both involuntary unemployment insurance and another form of consumer credit insurance, neither policy provides for a denial of benefits because of preexisting coverage by the other policy if insured events under both policies lead to simultaneous claims, and benefits are coordinated until all liability is paid in full.11. In the event of either voluntary or involuntary prepayment of the indebtedness, a refund of unearned premiums is made in accordance with article 4, title 5, C.R.S.12. If the policy provides for a waiting period after the effective date of the policy during which no claim may be made, that fact is disclosed in writing to the consumer.(c) "Involuntary unemployment insurance" means insurance providing the insured consumer with coverage for consumer credit repayment obligations for a period or periods during which the consumer is involuntarily unemployed. "Involuntary unemployment insurance" includes only insurance at least providing benefits for loss of employment income caused by individual or mass layoff, general strike, termination by employer, unionized labor dispute, and lockout. "Involuntary unemployment insurance" does not include insurance as to which a finance charge is imposed and provided in relation to a credit transaction in which a payment is scheduled more than ten (10) years after the extension of credit.Repealed effective November 1, 2000Rules 14 eff. 10/01/2008.Rule14 repealed eff. 07/30/2009.Rule 16 (1st un - numbered paragraph); eff.11/29/2010.