Current through Register Vol. 48, No. 12, March 22, 2024
a) Credit Life,
Health and Accident:
Licensees, at their option, may provide, but not require,
decreasing term credit life insurance and credit accident and health insurance
and make a charge to the obligor, providing the obligor has indicated in a
specific dated and separately signed statement that the coverage is not
required by seller and obligor desires the insurance coverage which is included
as a charge or paid by the obligor.
1)
The licensee may provide joint credit life or joint credit accident and health
insurance if both insured are obligated for the debt.
2) The maximum charge for credit life and
credit accident and health insurance shall be as prescribed by the State of
Illinois Department of Insurance.
3) When an account is prepaid in full the
obligor shall receive a refund of the unearned credit life, health and accident
insurance charges. The required refund shall be computed according to the
actuarial method. When the refund of either credit life or credit accident and
health premiums is less than $1.00, no refund is
required.
4) If the obligor dies
during the term of the transaction, the life insurance, if any, shall pay the
benefits due according to the terms of the policy. The obligor's estate shall
be paid the difference between the net unpaid balance and the insurance benefit
paid. Evidence of this payment shall be maintained by the licensee.
5) For death claims on account of credit life
insurance, the account cards shall indicate the date of death and the refunds
of finance charge and unearned insurance premiums paid to the estate. The
refund check or voucher number shall be available on demand.
6) Credit life and credit accident and health
insurance provided by a licensee may be cancelled within 15 days after the date
of the loan by written request of all parties to the obligation. In the event
of cancellation, the entire premium cost, if any, shall be refunded to the
obligors and insurance shall then be void from its
inception.
b) Property
Insurance:
1) Insurance against loss or
damage to property, or liability arising out of ownership may be required of an
obligor by the licensee.
2) The
amount of insurance shall be only in the amount sufficient to cover the cash
price of the item being financed.
c) All insurance provided by a licensee for
an obligor must be issued by insurance companies licensed to do business in the
State of Illinois and in compliance with the applicable provisions of the
Illinois Insurance Code and the administrative rules of the Department of
Insurance.
1) No obligor shall be required to
purchase any policy of insurance from any company, agent, broker or person as a
condition precedent to the extension or renewal of an obligation.
2) Insurance for a period less than the full
term may be agreed upon between the parties which agreement may be a part of
the contract or separate instrument.
3) No licensee shall decline new or existing
insurance which meets the standards set forth in the federal and State law or
prevent any obligor from obtaining insurance coverage from other sources. If
insurance is included in a transaction by the seller, the licensee shall upon
prepayment by the obligor notify the obligor and seller of the possibility of
rebate due by reason of such prepayment and the amount of rebate so
due.
4) It shall be the licensee's
responsibility to explain clearly to the obligor the type, cost, benefits and
limitations of any insurance requested by licensee after acquisition of the
account.
5) The licensee shall also
deliver or cause to be delivered to the obligor a copy of the policy, or
policies, certificate, or other evidence thereof acquired by the licensee in
connection with the indebtedness.
d) In the event of a judgment prior to
maturity of the loan, the judgment shall be decreased by the amount equal to
any unearned premium. Evidence of this payment shall be maintained by the
licensee.