Current through Register Vol. 54, No. 45, November 9, 2024
Section 90c.21 - Premiums paid by credit cardA program for premium payment by credit card that complies with the following is acceptable:
(1) Applications provide automatically for the payment of premiums by credit card or they provide for the election of a credit card payment method.(2) Life insurance applications providing for the payment of premiums by credit card contain specific wording as to when the insurance coverage is effective. If immediate coverage is not provided, the disclosure as to when coverage is effective is in prominent type, unless a receipt is given. Prominent type means, for example, all capital letters, contrasting color, underlined or otherwise differentiated from the other type in the application.(3) If the life insurance application is for use in direct response sales and the disclosure as to when coverage is effective specifies premium payment as a condition of coverage, then the disclosure as to when coverage is effective, indicates when the first premium is considered to be paid if it is paid by credit card. This indication as to when the first premium is considered to be paid does not indicate that it is considered to be paid after policy delivery unless the first page of the policy contains an express disclosure in prominent type that there is no insurance coverage until the effective date. Prominent type means, for example, all capital letters, contrasting color, underlined or otherwise differentiated from the other type in the policy.(4) Individuals paying premiums through credit cards are provided with the same treatment as individuals paying premiums directly to the company, except with respect to the premium payment mode periods, and with respect to the amount of premium if the different premium amount is due to the establishment of a separate class for contracts paid through credit cards.(5) The insurance contract provides that premiums billed on a credit card account statement are considered to have been paid to the insurer on the premium due date.(6) The insurance company provides a certification with the submission letter that it has established procedures whereby insureds whose premium charges are not accepted by the card issuer are given the opportunity to change to a direct premium payment mode on a basis that will afford continuity of coverage.(7) The insurance contract provides that the policyowner has the right to pay premiums directly to the insurer if the credit card used for billing is canceled, if the insurer cancels the credit card billing arrangement, or if the policyowner cancels the credit card billing arrangement.