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054.00.12-3. DISCLOSURE PROVISIONS.

AR ADC 054.00.12-3Arkansas Administrative Code

West's Arkansas Administrative Code
Title 054. Insurance Department
Division 00.
Rule 12. Credit Life and Credit Disability Insurance
Ark. Admin. Code 054.00.12-3
054.00.12-3. DISCLOSURE PROVISIONS.
Currentness
3.1 All credit life insurance and credit disability insurance shall be evidenced by an individual policy, or in the case of group insurance by a certificate of insurance, which individual policy or group certificate of insurance shall be delivered to the debtor at the time the indebtedness is incurred, except as hereinafter provided.
3.2 Each individual policy or group certificate of credit life insurance or credit disability insurance delivered or issued for delivery in this State shall, in addition to the other requirements of law, set forth:
(a) The name and home office address of the insurer and on group certificates, an identification of the master policy;
(b) The identity by name or otherwise of the insured debtor. If age is a condition of eligibility or termination, this shall be shown in the certificate;
(c) The rate or amount of payment, if any, to the debtor, separately for credit life insurance and credit disability insurance;
(d) The amount and term of insurance coverage shall be set forth or described;
(e) A description of the coverage including any and all exceptions, limitations and restrictions;
(f) A statement that the benefits shall be paid to the creditor to reduce or extinguish the indebtedness and, wherever the amount of insurance may exceed the unpaid indebtedness, that any such excess shall be payable to a beneficiary, other than the creditor, or in the absence of such designation to surviving spouse, or to his estate.
(g) A statement indicating that upon discharge of the indebtedness by a prepayment, renewal, refinancing, or otherwise, the insurance shall be terminated, and that in all cases of termination prior to scheduled maturity, a refund of any unearned amount paid by or charged to the debtor for insurance shall be made in accordance with the appropriate formula set forth in Section 10 herein. No refund need be made if the amount thereof is two dollars or less. (In the case of the termination of credit life insurance by death of the insured debtor, the life insurance premium paid or then due and payable to the insurer is deemed earned, and no refund thereof is required.)
3.3 If said individual policy or group certificate of insurance is not delivered to the debtor at the time the indebtedness is incurred, a copy of an application for such individual policy or a notice of such proposed group insurance coverage shall be delivered to the debtor at the time such indebtedness is incurred, and such application or notice of proposed insurance shall be signed by the debtor and shall set forth:
(a) The name and home office address of the insurer and on notices of proposed group insurance, an identification of the master policy;
(b) The identity by name or otherwise of the insured debtor. If age is a condition of eligibility or termination, this shall be shown in the application or notice signed by the debtor;
(c) The rate or amount of payment, if any, to the debtor, separately for credit life and credit disability insurance;
(d) The amount of the insurance coverage shall be set forth or described;
(e) A brief description of the coverage including any and all exceptions, limitations and restrictions.
3.4 The copy of such application or notice of proposed insurance shall refer exclusively to insurance coverage and shall be separate and apart from the loan, sale or other credit statement of account, instrument or agreement, unless the information above required appears in type of at least equal size and prominence as the other provisions of said statement of account, instrument or agreement.
3.5 The policy or certificate of insurance shall not contain provisions which would encourage misrepresentation or are unjust, unfair, inequitable, misleading, deceptive or contrary to law or to the public policy of this State.
3.6 Within thirty (30) days after the insurance becomes effective as provided in Ark. Stat. Ann. ยง 66-3809(2), the insurer shall cause the individual policy or group certificate of insurance to be delivered to the debtor.
3.7 A group credit insurance policy which provides for payment of single premiums to the insurer shall provide that, in the event of termination of such policy by the insurer or creditor, insurance coverage with respect to any debtor insured under such policy shall be continued for the entire period for which a single premium has been paid by such debtor, subject to the debtor's right to cancel the insurance at any time by express action. A group credit insurance policy under which premiums are paid to the insurer monthly on outstanding balances shall contain a provision that, in the event of termination of such policy by the insurer or creditor, thirty-one (31) days notice of such termination shall be given to any debtor insured under the policy by the insurer where practicable, otherwise by the creditor unless there is immediate replacement of the coverage by the ewe or another insurer. With respect to debtors covered at the date of termination where notice is required, coverage shall continue as though the policy had not terminated until notice is given.
3.8 All applications for Credit Life and Credit Disability Insurance, and where no application is used,, all policies and certificates of credit life and credit disability insurance shall be signed by the insured debtor. Nothing in this regulation shall be construed to conflict with this requirement.
Current with amendments received through February 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 054.00.12-3, AR ADC 054.00.12-3
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