New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter VII - Credit And Creditor Insurance
Part 187 - Credit Unemployment Insurance
Section 187.5 - Amount and term of credit unemployment insurance

Universal Citation: 11 NY Comp Codes Rules and Regs ยง 187.5

Current through Register Vol. 46, No. 12, March 20, 2024

(a) Amount of credit unemployment insurance.

(1) The amount of insurance on any person insured under a policy shall not at any time exceed (i) in all cases except as hereinafter provided the lesser of $55,000 and the total of payments scheduled to be paid by the person to whom credit has been extended; (ii) in the case of a loan commitment pursuant to a program for defraying the cost of attendance of a student at a college or university or at such an elementary or secondary school providing education for minors, the lesser of $55,000 and the total amount of the unpaid balance of the scheduled periodic payments whether due or not due and the amount of any outstanding loan commitment pursuant to such a program; (iii) in the case of a transaction secured by a real estate mortgage, the lesser of $110,000 and the total of payments scheduled to be paid by the person to whom credit has been extended; or (iv) in all cases the amounts of the payment or payments due during the period of umemployment of the covered person, excluding such amounts which may become due by acceleration or defaults.

(2) The amount of insurance with respect to any person insured under a policy insuring persons who are tenants or stockholders of a mutual or other housing corporation (organized pursuant to the provisions of the Private Housing Finance Law and regulated by such statute as to rent, dividends and profits) issued with identifiable charges or fixed amounts of premiums to such corporation or to a trustee or trustees or agent designated by one or more such corporations may be continued for the term of the tenant's lease with such corporation or 36 months or whichever is the greater period, and the amount of insurance with respect to any person insured under such policy may be a fixed amount not greater than the lesser of $55,000 or an amount equal to 36 times the monthly installments due under such lease.

(3) In the event the Insurance Law is amended so as to fix dollar amounts other than as stated in paragraphs (1) and/or (2) of this subdivision, such amounts shall supersede those in paragraphs (1) and/or (2) of this subdivision.

(4) Except upon good cause shown and with the approval of the Superintendent of Insurance, an insurer shall not issue insurance in case of loans, except those subject to section 187.12 of this Part, repayable in less than 18 monthly installments wherever a debtor shall be required to pay a premium or identifiable charge in connection with credit unemployment insurance providing indemnities of less then $30 per month.

(b) The term of any credit unemployment insurance shall, subject to acceptance by the insurer if required, and unless otherwise permitted pursuant to section 187.4(d) of this Part commence on the date when the debtor becomes obligated to the creditor, except that, where a group policy provides coverage with respect to existing obligations, the insurance on a debtor with respect to such indebtedness, unless otherwise expressly authorized by the Superintendent of Insurance, shall commence on the effective date of the group certificate.

(c) Notwithstanding anything in the preceding subdivisions to the contrary (1) the insurance of borrowers, who incur indebtedness arising from the granting of policy loans pursuant to policy provision therefor, provided under a group policy issued to the insurance company granting the policy loan, may be continued for the duration of the indebtedness, and (2) under any plan expressly approved by the Superintendent of Insurance the insurance of debtors under a group policy with respect to an agreement which does not provide for repayment in installments may be continued for the duration of such indebtedness but not more than seven years from the date such indebtedness is incurred.

(d) If the indebtedness is discharged due to prepayment, the insurance in force shall be terminated and, if the indebtedness is discharged due to renewal or refinancing prior to the scheduled maturity date, the insurance in force shall be terminated before any new insurance may be issued in connection with the renewed or refinanced indebtedness. For any renewed or refinanced indebtedness, no eligibility requirements may be reimposed with respect to the loan amounts and durations in force immediately prior to such renewal or refinancing. The maximum benefit payable in the absence of the insured satisfying the eligibility requirements for new indebtedness may be limited to the maximum benefit remaining immediately prior to such renewal or refinancing. In all cases of termination prior to scheduled maturity, a refund shall be paid or credited as provided in section 187.7 of this Part.

(e) The term of an individual policy of credit unemployment insurance shall not extend more than 35 years from the date the indebtedness is incurred.

(f) An individual policy of credit unemployment insurance by its terms shall not be cancelable by the insurer, except for nonpayment of premium, prior to the earliest of (1) the scheduled maturity date of the indebtedness; (2) the date on which the indebtedness is discharged due to prepayment, refinancing, or renewal; or (3) the expiration of the longer of the four-year period following the date on which the indebtedness was insured or the period for which the premium has been paid. In the case of a specific loan or other credit transaction of more than four years' duration, this rule shall be applicable to each successive four-year period during which the credit unemployment insurance is renewed or otherwise continued in force.

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