2.59.303 CREDIT INSURANCE
(1) A consumer loan licensee may not sell, solicit, or negotiate insurance or act as an insurance producer or insurance agency in this state unless licensed under Title 33, chapter 17, MCA. A consumer loan licensee holding an insurance producer or insurance agency license shall conspicuously display the insurance license in its main consumer loan office and shall comply with all applicable provisions of the Montana Insurance Code, Title 33, MCA.
(2) A licensee may not require any borrower or prospective borrower to purchase or contract for credit life insurance, credit disability insurance, or loss of income insurance as a condition precedent to granting any loan.
(3) A licensee may advise borrowers or prospective borrowers or advertise generally and publicly that credit life insurance, credit disability insurance, and loss of income insurance are available at additional cost to the borrower on loans meeting the requirements of (4).
(4) A licensee may not place credit life insurance, credit disability insurance, or loss of income insurance on any loan of $300 or less in principal amount exclusive of charges for insurance premiums.
(5) The amount and term of credit life insurance, credit disability insurance, or loss of income insurance placed by a licensee must conform to the provisions of 33-21-202 and 33-21-203, MCA.
(6) The individual insurance policy, the certificate of group insurance, the copy of the application for insurance, or the notice of proposed insurance, must be delivered to the borrower at the time the indebtedness is incurred and statements concerning the coverage provided must comply with 33-21-204, MCA.
(7) A licensee must have on file for each credit life insurance, credit disability insurance, and loss of income insurance transaction a signed statement from the borrower that procurement of the insurance was not made a condition precedent to the granting of the loan. The statement may be a part of the loan statement, certificate of group insurance, or application for insurance, if the document is retained in the borrower's loan file for the two-year period required by 32-5-307, MCA. If a separate signed statement is used, the statement must be retained in the borrower's loan file for the same period.
(8) Refunds of unearned premiums for credit life insurance, credit disability insurance, and loss of income insurance must be made in accordance with the Montana Insurance Code (33-21-206, MCA).
(9) A licensee shall enter on each borrower's loan account record the amount of credit life, credit disability, or loss of income insurance premium charged in connection with the loan.
(10) Before any credit life insurance, credit disability insurance, or loss of income insurance premium is placed by a consumer loan licensee on any loan contract, the licensee must file with the department a statement containing the following information:
(a) the name and home address of the insurer or insurers with whom licensee intends to place such insurance;
(b) the rate of charge for premiums on the insurance to be collected from the borrower, expressed in terms of dollars and cents per month (or per year) per one hundred dollars of original balance of the loan;
(c) borrower eligibility criteria for credit life insurance, credit disability insurance, and loss of income insurance; and
(d) the basis or schedule upon which refunds to borrowers of unearned premiums are to be computed consistent with the refund formula filed with and approved by the Commissioner of Insurance under 33-21-206(2), MCA.
(11) For the purpose of providing adequate information for the annual report required by 32-5-308, MCA, a licensee shall keep accurate accounts to reflect the following:
(a) total net charges to borrowers for credit life, credit disability, and loss of income insurance placed by the licensee;
(b) total premiums remitted to insurers for the coverage;
(c) total commissions or dividends received by licensee from insurers;
(d) total of loans and loan balances paid by insurers under credit life policies upon death of borrowers;
(e) total of loans and payments received from insurers on loans under credit disability policies; and
(f) total of loans and payments received from insurers on loans under loss of income policies.
(12) The insurance information required under (11) must be reported in the aggregate in the licensee's annual report and must also be broken down by loan and maintained in each individual loan file.
History: 32-5-401, MCA; IMP, 32-5-306, 32-5-307, 32-5-308, MCA; Eff. 12/31/72; TRANS, from Commerce, 2001 MAR p. 1178; AMD, 2014 MAR p. 498, Eff. 3/14/14; AMD, 2015 MAR p. 2246, Eff. 12/25/15.