Delaware Code Title 5 Sec. 930 – Right of cancellation of certain insurance
(a) Except as otherwise provided in this section, in the case of any extension of credit by the bank or trust company engaged directly or indirectly in activities first authorized under § 761(a)(14) or § 1661(a)(14) of this title to an individual borrower in connection with which insurance is obtained from such bank or trust company, or any subsidiary thereof engaged in activities first authorized under § 761(a)(14) or § 1661(a)(14) of this title, the individual borrower shall have the right to cancel the purchase of such insurance until midnight of the 30th calendar day following the consummation of the transaction or the delivery of the information and forms required under this section, whichever is later. Within the first 10 days, the individual borrower shall be entitled to an unconditional refund of the premium upon serving notice of cancellation as provided herein. The individual borrower shall effect such cancellation by notifying the bank or trust company or its subsidiary, in accordance with the regulations of the Commissioner, of an intention to do so. In accordance with the regulations of the Commissioner, the bank or trust company or its subsidiary shall:
(1) Clearly and conspicuously disclose to any individual borrower in a transaction subject to this section the rights of the individual borrower under this section; and
(2) Provide appropriate forms for the exercise by the individual borrower of this right to cancel any insurance subject to this section. Such forms shall contain a clear and specific statement setting forth:
a. The cost of the insurance;
b. That the individual borrower may choose the person through which the insurance is to be obtained;
c. The individual borrower’s right to use the cancellation period to obtain price quotations for insurance from other sources;
d. The actions necessary for the individual borrower to cancel the insurance; and
e. The individual borrower’s right to receive a credit or the unearned portion of the insurance premium after cancellation.
Terms Used In Delaware Code Title 5 Sec. 930
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Finance charge: The total cost of credit a customer must pay on a consumer loan, including interest. The Truth in Lending Act requires disclosure of the finance charge. Source: OCC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- State: means the State of Delaware; and when applied to different parts of the United States, it includes the District of Columbia and the several territories and possessions of the United States. See Delaware Code Title 1 Sec. 302
- United States: includes its territories and possessions and the District of Columbia. See Delaware Code Title 1 Sec. 302
(b) Within 20 days after the unconditional recision period if no liability for a loss under the insurance has been incurred, the bank or trust company or its subsidiary shall:
(1) Credit the unearned portion of the premium, computed in accordance with applicable law or regulation promulgated by the Insurance Commissioner to enforce the provisions of this section, as of the date of cancellation and, where the premium has been financed, credit the unearned portion of the finance charge, if any, attributable to the insurance, computed as of the date of cancellation in accordance with the terms of the contract documents; or
(2) At the option of the individual borrower, refund the unearned portion of the premium to the borrower.
(c) When the insurance written in connection with an extension of credit is against loss of, or damage to, or against liability arising out of ownership or use of, property used as security for the extension of credit, the bank or trust company or its subsidiary may require evidence that the individual borrower has obtained other adequate insurance before exercising the right of cancellation set forth in this subsection. For reasonable cause, a bank or trust company on its subsidiary may refuse to accept an insurer offered by the individual borrower; provided, however, that a bank or trust company shall accept a policy of insurance issued by an authorized insurer offered by the individual borrower, so long as such insurer is not then impaired, insolvent, the subject of any rehabilitation or liquidation proceeding, or deemed by the Insurance Commissioner to be otherwise disqualified.
(d) Any individual borrower who has the right to cancel insurance under this section in connection with an obligation which has been assigned may cancel the insurance only by delivering to the assignee of the obligation the notice of cancellation required by this section. Delivery shall be considered made when mailed, or if sent by other means, when received by the assignee.
(e) Any individual borrower who exercises the right to cancel the purchase of insurance pursuant to this section shall not be subject to the imposition of any fee, cancellation charge, or other penalty payment.
(f) For purposes of this section, “individual borrower” means a borrower who is a natural person borrowing for personal, household or family purposes, or business or commercial purposes where the natural person employs 500 employees or less, or a borrower who is a corporation, partnership, limited partnership or other business entity which is borrowing for business or commercial purposes and which employs 500 employees or less.
(g) The rights provided under this section shall be in addition to, and not in derogation of, those provided by contract under the laws of the United States, the laws of this State, and all other applicable statutes, rules and regulations.
67 Del. Laws, c. 223, § ?12; 70 Del. Laws, c. 186, § ?1; 71 Del. Laws, c. 25, § ?34;