Louisiana Revised Statutes 6:969.25 – Consumer credit insurance
Terms Used In Louisiana Revised Statutes 6:969.25
- Consumer: means a natural person who enters into a consumer loan or consumer credit sale of a motor vehicle to be used primarily for personal, family, or household purposes. See Louisiana Revised Statutes 6:969.6
- Consumer credit insurance: means insurance, other than insurance on property, by which the satisfaction of debt in whole or in part is a benefit provided, but does not include insurance indemnifying the extender of credit against loss due to the debtor's default and non-filing insurance. See Louisiana Revised Statutes 6:969.6
- Contract: A legal written agreement that becomes binding when signed.
- Contract: means the consumer's retail installment contract, note, agreement, or other evidence of indebtedness executed in connection with a motor vehicle credit transaction. See Louisiana Revised Statutes 6:969.6
- Credit health and accident insurance: means disability insurance purchased in conjunction with a motor vehicle credit transaction which provides for a monthly benefit sufficient to pay all or part of the required monthly payment, during the continued disability of the insured, over the term of coverage. See Louisiana Revised Statutes 6:969.6
- Credit life insurance: means term life insurance purchased in conjunction with a motor vehicle credit transaction which provides a death benefit payable to the lender, or to the insured consumer's beneficiary to the extent the death benefit exceeds the amount necessary to fully pay and satisfy the transaction, in the event of the insured consumer's death during the term of coverage. See Louisiana Revised Statutes 6:969.6
- Credit service charge: means the sum of the following:
(i) All charges payable directly or indirectly by the consumer and imposed directly or indirectly by the seller as a requirement of the extension of credit, including any of the following types of charges that are applicable: interest; time price differential; service; carrying or other charge, however denominated; points and discount fees; and premium or other charge for any guarantee or insurance protecting the extender of credit against the consumer's default or other credit loss. See Louisiana Revised Statutes 6:969.6
- creditor: means a seller in a consumer credit sale, or a lender in a consumer loan. See Louisiana Revised Statutes 6:969.6
- 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
- Motor vehicle: means any new or used transportation device, including automobiles, motorcycles, trucks, and other vehicles that are operated over the public highways and the streets of this state, but does not include traction engines, boat trailers, road rollers, implements of husbandry, and other agricultural vehicles. See Louisiana Revised Statutes 6:969.6
- Motor vehicle credit transaction: means a consumer loan or a consumer credit sale involving a Louisiana consumer, or that is otherwise made subject to this Chapter. See Louisiana Revised Statutes 6:969.6
A. An extender of credit may request or require a consumer to provide consumer credit insurance as additional security under the transaction. The extender of credit may also offer consumer credit insurance to the consumer for purchase on an optional basis. If the extender of credit offers consumer credit insurance for purchase on an optional basis, the creditor shall disclose to the consumer at the time of contracting his option to purchase such insurance coverage, and shall make such disclosures as are required by Regulation Z, 12 C.F.R. § 226.1 et seq. The cost of consumer credit insurance, if required by the extender of credit, is deemed to be a portion of the credit service charge or loan finance charge for the purpose of computing maximum rates.
B. Consumer credit insurance may be written with respect to each individual who is an obligor or co-obligor under a motor vehicle credit transaction. The amount of credit life insurance coverage on any one obligor or co-obligor with respect to any one motor vehicle credit transaction may not exceed the total sum payable under such contract including all loan finance charges and credit service charges. Additionally, the amount of credit health and accident insurance coverage on any one obligor or co-obligor with respect to any one motor vehicle credit transaction may not exceed the total sum payable under such contract including all loan finance charges and credit service charges.
C.(1) The premium rate for declining balance credit life insurance shall not exceed eighty cents per one hundred dollars per annum.
(2) The premium rate for level term credit life insurance shall not exceed one dollar and sixty cents per one hundred dollars per annum.
(3) The premium rate for joint credit life insurance shall not exceed one dollar and twenty cents per one hundred dollars per annum.
(4) The premium rate for joint level term credit life insurance shall not exceed two dollars and forty cents per one hundred dollars per annum.
D. The premium rate for credit dismemberment insurance shall not exceed twenty-five cents per one hundred dollars per annum.
E.(1) No policy of credit health and accident insurance may be issued pursuant to a motor vehicle credit transaction other than seven-day, fourteen-day, or thirty-day retroactive health and accident insurance.
(2) The premium rates for retroactive credit accident and health insurance issued pursuant to a motor vehicle credit transaction shall not exceed the rates set forth in the following schedule:
Amount per $100.00
7-Day
14-Day
30-Day
Months
Retro
Retro
Retro
0 – 6
$1.75
$1.10
$ .85
more than 6 through 12
3.50
2.20
1.70
more than 12 through 24
4.30
3.00
2.50
more than 24 through 36
5.10
3.80
3.30
more than 36 through 48
5.60
4.60
4.10
more than 48 through 60
6.00
5.40
4.90
more than 60 through 72
6.80
6.20
5.70
more than 72 through 84
7.60
7.00
6.50
more than 84 through 96
8.40
7.80
7.30
more than 96 through 108
9.20
8.60
8.10
more than 108 through 120
10.00
9.40
8.90
F. Notwithstanding any other provision of law to the contrary, an extender of credit may offer any insurance authorized by the Louisiana Insurance Code in connection with any extension of credit subject to this Chapter.
Acts 1999, No. 794, §1, eff. July 2, 1999.