N.J. Admin. Code § 11:2-3.7

Current through Register Vol. 56, No. 24, December 18, 2024

Section 11:2-3.7 - Credit life insurance in connection with leases of personal property

(a) Credit life insurance may be issued in connection with leases of personal property only when, pursuant to the terms of the lease, death of the lessee imposes a financial obligation to the lessor on the lessee's estate.

(b) The amount of credit life insurance issued in connection with leases of personal property shall equal the financial liability of the lessee's estate to the lessor pursuant to the terms of the lease upon the death of the lessee.

(c) Credit life insurance coverage issued in connection with leased personal property shall be net coverage.

(d) Credit life insurance issued in connection with leased personal property shall not cover any optional payment to purchase the leased property. When the lease requires the purchase of the leased item at the end of the lease term, credit life insurance may be provided, on a level term basis, to cover the purchase payment.

(e) Any insurance payable in excess of the amount due to the lessor shall be paid to the lessee's successor in interest.

(f) The following disclosures shall be made when credit life insurance is issued in connection with leases of personal property:

1. The credit life insurance form shall contain a clear definition of the death benefit, either by schedule or formula, so that the amount payable at death is determinable.

2. Insurers shall provide in boldface, 10 point type notice at the time of application that credit life insurance coverage is not required. Such notice shall contain a date and signature section to be completed by the applicant. The notice shall be submitted to the Commissioner with the credit life insurance forms along with a statement of the manner in which the notice will be provided to applicants.

N.J. Admin. Code § 11:2-3.7

New Rule, R.1996 d.206, effective 5/20/1996.
See: 27 New Jersey Register 3676(a), 28 New Jersey Register 2621(a).
Former section, "Delivery of policy; procedures", recodified to 11:2-3.12.