Certain licensees may sell optional insurance with a consumer lender loan only if listed conditions are met, and consumers have cancellation and refund rights.
6-638 - Other insurance 6-638 . Other insurance A. A licensee who is licensed to sell life insurance pursuant to title 20 may sell and include in the principal amount of a consumer lender loan the cost of the premium for life insurance that is not for credit if all of the following apply: 1. The insurance policy or certificate is approved by the director. 2. The purchase of the insurance is not a condition of the consumer lender loan. 3. The consumer signs an application for the insurance that is separate from the consumer lender loan application. 4. The licensee does not offer or discuss with the consumer the option of life insurance until after the consumer lender loan application is completed and the consumer lender loan is approved. B. A licensee who is licensed to sell disability insurance pursuant to title 20 may sell and include in the principal amount of the consumer lender loan the cost of the premium for accidental death and dismemberment insurance or disability income protection insurance, or both, if all of the following apply: 1. The insurance policy or certificate is approved by the director. 2. The purchase of the insurance is not a condition of the consumer lender loan. 3. The consumer signs an application for the insurance that is separate from the consumer lender loan application. 4. The licensee does not offer or discuss with the consumer the option of accidental death and dismemberment insurance or disability income protection insurance until after the consumer lender loan application is completed and the consumer lender loan is approved. C. Any insurance purchased by the consumer pursuant to this section is optional and the licensee shall disclose in writing to the consumer that the insurance is optional. D. The consumer may cancel the insurance for any reason at any time within thirty days after the date of purchase and the consumer shall receive a full refund of the premium within five days after the date of cancellation. If the consumer cancels the insurance after thirty days from the date of purchase, the consumer shall receive a refund of the unearned premium in accordance with the insurance policy. In the event the consumer cancels the insurance, the licensee shall give the consumer the amount of any refund of premium or shall credit the consumer's lender loan at the option of the consumer. For the purposes of this subsection, the date of cancellation is defined as the date the licensee receives the receipt for the notice of cancellation for the insurance policy. E. If the consumer decides to cancel the policy, the consumer shall either: 1. Return the policy to the insurer or to the licensee at the licensee's place of business. 2. Provide written notice of cancellation to the insurer or to the licensee at the licensee's place of business. F. The licensee shall give the consumer a written copy of the provisions of this section.