Current through August, 2024
Section 1
Authority
This Regulation is promulgated under the authority granted to
the Commissioner of the Department of Banking, Insurance, Securities and Health
Care Administration by
8 V.S.A.
§§
15 and
4813a(6).
Section 2 Purpose
The purpose of this Regulation is to establish a Limited
Lines Producer License for the sale of Credit Insurance and to set forth
requirements for the sale of Credit Insurance by a Limited Lines Credit
Insurance Producer.
Section
3 Scope
This Regulation governs the sale, solicitation and
negotiation of Credit Insurance by a Limited Lines Credit Insurance
Producer.
Section 4
Definitions
As used in this Regulation:
A. "Credit Insurance" means credit life,
credit disability, credit property, credit unemployment, involuntary
unemployment, mortgage life, mortgage disability, guaranteed automobile
protection (gap) insurance, which are hereby designated as forms of limited
line Credit Insurance for purposes of this Regulation, and any other form of
insurance offered to a consumer in connection with an extension of credit to
such consumer that is limited to partially or wholly extinguishing such credit
obligation and which the Commissioner designates as a form of limited line
Credit Insurance for purposes of this Regulation. For purposes of this
Regulation, "Credit Insurance" shall not include Private Mortgage Insurance
("PMI").
B. "Limited Lines Credit
Insurance Producer" means a natural person licensed pursuant to this Regulation
to sell, solicit or negotiate Credit Insurance.
C. "Insurer" means any insurance company
licensed to offer, sell or negotiate Credit Insurance in this state.
Capitalized terms not defined in this Regulation shall have
the meaning set forth in
8 V.S.A. §
4813a.
Section 5 General Requirements
A. The Commissioner hereby determines that
the solicitation, sale and negotiation of Credit Insurance in this state does
not require the professional competency of a licensed Insurance Producer and
that an individual involved in such activities shall be subject to the
requirements of this Regulation except as provided in Section
5(D) of
this Regulation.
B. A Limited Lines
Credit Insurance Producer must be appointed by any Insurer with which Credit
Insurance is sold, solicited or negotiated.
C. A Limited Lines Credit Insurance Producer
shall not be subject to training or continuing education requirements with
respect to the sale, solicitation or negotiation of Credit Insurance other than
as set forth in this Regulation.
D.
This Regulation shall not apply to a licensed Insurance Producer or to an
individual operating under a Business Entity Limited Lines Producer License
granted pursuant to Regulation I-2007-01.
Section 6 Licensing
To obtain a Limited Lines Credit Insurance Producer license,
an individual must:
A. Submit to the
Commissioner an application and fees for licensure as required under 8 V.S.A.
Chapter 131;
B. Be appointed by an
Insurer to act as its agent; and
C.
Have read the provisions of this Regulation.
Section 7 Limited Lines Credit Insurance
Producer Requirements
No Credit Insurance may be offered, sold, solicited or
negotiated pursuant to this Regulation unless the Limited Lines Credit
Insurance Producer:
A. Informs a
consumer applying for Credit Insurance that the purchase of Credit Insurance is
not required for a consumer to make a purchase or obtain financing;
B. Makes no representation to the consumer
that Limited Line Credit Insurance Producer is qualified to evaluate the
adequacy of the consumer's existing insurance coverages, including but not
limited to whether the consumer has coverage with respect to the purchase or
financing transaction at issue;
C.
Separately itemizes all costs for the Credit Insurance in any loan or purchase
documents and agreements; and
D.
Provides, at the time of application for Credit Insurance, in writing, the
following information to a consumer:
1. The
purpose of the proposed coverage;
2. Proposed coverage amounts;
3. Cost of coverage (which may be expressed
in terms of the total cost of the proposed coverage or in terms of the unit
cost of coverage relative to various dollar amounts of a loan or purchase) and
the availability of refunds, if applicable;
4. Name of the Insurer;
5. Any limitations or exclusions of the
proposed coverage;
6. Any
underwriting requirements, including pre-existing condition limitations or
eligibility requirements;
7. A
statement whether an application is accepted and coverage is effective upon
receipt of a completed application by the Limited Lines Credit Insurance
Producer or, if not, when and how the consumer will be told whether an
application is accepted and when coverage is effective;
8. A certificate of coverage or other
evidence of coverage if available, or a copy of the application for insurance
or other receipt if evidence of coverage is not available; and
9. A description of the process for filing a
claim, including a toll-free number of the Insurer to report a claim.
If the consumer applies for Credit Insurance through a medium
other than applying in writing, the foregoing information may be provided to
the consumer in compliance with Title 9 V.S.A., Chapter 20.
Section 8 Trust Accounts
A. A Limited Lines Credit Insurance Producer
shall establish trust accounts for moneys collected from applicants purchasing
Credit Insurance in accordance with the requirements of Regulation 95-1, Trust
Accounts.
B. Any money held in
trust for an Insurer or a consumer shall be paid to such Insurer or consumer
within thirty-five (35) business days of receipt.
C. This Section shall not apply to a Limited
Lines Credit Insurance Producer with respect to the solicitation, sale or
negotiation of Credit Insurance by a Business Entity licensed as a Business
Entity Limited Lines Credit Insurance Producer pursuant to Regulation
I-2007-01, where the Limited Lines Credit Insurance Producer is the Designated
Responsible Licensed Producer for such Business Entity as defined in Regulation
1-2007-01.
Section 9
Record Retention
A Limited Lines Credit Insurance Producer shall comply with
all record retention requirements set forth in Regulation 99-1, Record
Retention. Each licensee shall keep records of the transactions under the
license granted pursuant to this Regulation. This Section shall not apply to a
Limited Lines Credit Insurance Producer with respect to the solicitation, sale
or negotiation of Credit Insurance by a Business Entity licensed as a Business
Entity Limited Lines Credit Insurance Producer pursuant to Regulation
I-2007-01, where the Limited Lines Credit Insurance Producer is the Designated
Responsible Licensed Producer for such Business Entity as defined in Regulation
I-2007-01.
Section 10
Effective Date
This Regulation shall take effect on May 1,
2008.
