PRIOR PRINTER'S NOS. 679, 1378 PRINTER'S NO. 1862
No. 601 Session of 1985
INTRODUCED BY SEVENTY, DAWIDA, DUFFY, WOZNIAK, MRKONIC,
BATTISTO, VAN HORNE, COWELL, TRELLO, MICHLOVIC, DeLUCA,
MAYERNIK, GAMBLE, BOOK AND BURD, MARCH 18, 1985
AS RE-REPORTED FROM COMMITTEE ON INSURANCE, HOUSE OF
REPRESENTATIVES, AS AMENDED, JUNE 26, 1985
AN ACT
1 Amending the act of September 2, 1961 (P.L.1232, No.540),
2 entitled "An act providing for the regulation of credit life
3 insurance and credit accident and health insurance;
4 conferring powers and imposing duties on the Insurance
5 Commissioner and prescribing penalties," further providing
6 for the definition of "credit life insurance"; and further
7 providing for credit life insurance and credit accident and
8 health insurance and the term of insurance.
9 The General Assembly of the Commonwealth of Pennsylvania
10 hereby enacts as follows:
11 Section 1. Section 2(b) of the act of September 2, 1961
12 (P.L.1232, No.540), known as the Model Act for the Regulation of
13 Credit Life Insurance and Credit Accident and Health Insurance,
14 amended December 10, 1974 (P.L.847, No. 284), is amended to
15 read:
16 Section 2. Scope of Act; Short Title; Definitions.--* * *
17 (b) As used in this act:
18 (1) "Credit life insurance" means insurance on the life of a
19 debtor pursuant to or in connection with a specific loan or
20 other credit transaction. Where more than one person are jointly
1 obligated under a contract of indebtedness, credit life
2 insurance may be written on either an individual basis or, at
3 the option of the debtors, on a joint basis.
4 (2) "Credit accident and health insurance" means insurance
5 on a debtor to provide indemnity for payments becoming due on a
6 specific loan or other credit transaction while the debtor is
7 disabled as defined in the policy.
8 (3) "Creditor" means the lender of money or vendor or lessor
9 of goods, services, property rights or privileges for which
10 payment is arranged through a credit transaction or any
11 successor to the right, title or interest of any such lender,
12 vendor or lessor and an affiliate, associate or subsidiary of
13 any of them or any director, officer or employe of any of them
14 or any other person in any way associated with any of them.
15 (4) "Debtor" means a borrower of money or a purchaser or
16 lessee of goods, services, property rights or privileges for
17 which payment is arranged through a credit transaction.
18 (5) "Indebtedness" means the total amount payable by a
19 debtor to a creditor in connection with a loan or other credit
20 transaction.
21 (6) "Commissioner" means the Insurance Commissioner.
22 (7) "Mobile home" means any portable structure or movable
23 unit equipped to be drawn or travel on the public highways and
24 streets that is used either temporarily or permanently as a
25 residence home, dwelling unit, apartment or other housing
26 accommodation or as an office.
27 (8) "Dwelling trailer" means any portable dwelling structure
28 or movable dwelling unit designed, constructed and equipped for
29 human use with a chassis or undercarriage as an integral part
30 thereof, with or without independent motive power, capable of
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1 being drawn or driven upon the public highways and streets.
2 Section 2. Sections 3 and 5 SECTION 3 of the act are IS <--
3 amended to read:
4 Section 3. Forms of Credit Life Insurance and Credit
5 Accident and Health Insurance.--Credit life insurance and credit
6 accident and health insurance shall be issued only in the
7 following forms:
8 (1) Individual policies of life insurance to insure the
9 lives of debtors on the term plan.
10 (2) Individual policies of accident and health insurance to
11 insure debtors on a term plan or disability benefit provisions
12 in individual policies of credit life insurance.
13 (3) Group policies of life insurance issued for delivery to
14 creditors providing insurance upon the lives of debtors on the
15 term plan. Except for policies insuring the lives of debtors
16 with revolving loans or revolving credit, such policies shall
17 include, at the option of the debtor, periodic payments in the
18 event of total and permanent disability. AN INSURED DEBTOR IS <--
19 CONSIDERED TOTALLY AND PERMANENTLY DISABLED IF, AFTER A SIX
20 MONTH WAITING PERIOD, A DOCTOR CERTIFIES THAT AS A RESULT OF
21 BODILY INJURY OR DISEASE, THE INSURED DEBTOR WILL BE
22 CONTINUOUSLY UNABLE TO ENGAGE IN ANY OCCUPATION, EMPLOYMENT OR
23 ACTIVITY FOR COMPENSATION OR PROFIT FOR WHICH THE DEBTOR IS
24 SUITED BY REASON OF EDUCATION, TRAINING AND EXPERIENCE. THE SIX
25 MONTH WAITING PERIOD AND THE DOCTORS CERTIFICATION MAY BE WAIVED
26 UPON DUE PROOF THAT THE DEBTOR SUFFERED THE LOSS OF SIGHT OF
27 BOTH EYES, OR THE SEVERANCE OF BOTH HANDS OR OF BOTH FEET, OR OF
28 ONE HAND AND ONE FOOT.
29 (4) Group policies of accident and health insurance issued
30 for delivery to creditors on a term plan insuring debtors or
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1 disability benefit provisions in group credit life insurance
2 policies to provide such coverage.
3 Section 5. Term of Credit Life Insurance and Credit Accident <--
4 and Health Insurance.--The term of any credit life insurance or
5 credit accident and health insurance shall, subject to
6 acceptance by the insurer, commence on the date when the debtor
7 becomes obligated to the creditor or the date from which
8 interest or finance charges accrue if later, except that where a
9 group policy provides coverage with respect to existing
10 obligations, the insurance on a debtor with respect to such
11 indebtedness shall commence on the effective date of the policy.
12 Where evidence of insurability is required and such evidence is
13 furnished more than thirty days after the date when the debtor
14 becomes obligated to the creditor, the term of the insurance may
15 commence on the date on which the insurance company determines
16 the evidence to be satisfactory and, in such event, there shall
17 be an appropriate refund or adjustment of any charge to the
18 debtor for insurance. The term of such insurance shall not
19 extend more than fifteen days beyond the scheduled maturity date
20 of the indebtedness, except when extended without additional
21 cost to the debtor: Provided, however, That nothing shall
22 prohibit the term of the insurance from being less than the
23 scheduled maturity date of the loan. If the indebtedness is
24 discharged due to renewal or refinancing prior to the scheduled
25 maturity date, the insurance in force shall be terminated before
26 any new insurance may be issued in connection with the renewed
27 or refinanced indebtedness. In all cases of termination prior to
28 scheduled maturity, a refund shall be paid or credited as
29 provided in section 8.
30 Section 3. This act shall take effect in 90 180 days. <--
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