New Jersey Statutes 17:16V-2. Definitions relative to collateral protection insurance
Terms Used In New Jersey Statutes 17:16V-2
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Contract: A legal written agreement that becomes binding when signed.
- 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.
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- 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.
- person: includes corporations, companies, associations, societies, firms, partnerships and joint stock companies as well as individuals, unless restricted by the context to an individual as distinguished from a corporate entity or specifically restricted to one or some of the above enumerated synonyms and, when used to designate the owner of property which may be the subject of an offense, includes this State, the United States, any other State of the United States as defined infra and any foreign country or government lawfully owning or possessing property within this State. See New Jersey Statutes 1:1-2
“Collateral” means all personal property used to secure payment or performance pursuant to a credit transaction.
“Collateral protection insurance” means insurance purchased by a creditor in which the creditor is made the loss payee or beneficiary providing coverage against loss or damage to collateral as a result of fire, theft, damage or other risks that would impair the creditor’s interest in the collateral, which insurance is purchased as a result of the debtor’s failure to provide evidence of insurance or failure to maintain insurance covering the collateral as required in a credit agreement. “Collateral protection insurance” shall not include (1) insurance to protect the creditor following completion of foreclosure and sale or repossession and sale of the collateral, (2) credit insurance or mortgage protection insurance, (3) credit life insurance or credit health insurance as defined in N.J.S.17B:29-2, (4) insurance issued to cover personal or real property of the debtor which is not required by the creditor and is purchased by the creditor voluntarily, or (5) title insurance. The fact that the insurance may have some other designation or title, such as “creditor placed insurance,” shall not mean it is not collateral protection insurance as defined in this act.
“Cost of collateral protection insurance” or “cost” means the premium paid which premium includes all commissions and fees paid by the insurer, whether the commission is paid to the creditor, to a person or entity that is an affiliate of the creditor or to a person or entity that is unrelated to the creditor, or whether such commissions are for a fixed percentage. “Cost” shall also include all fees, penalties and administrative costs charged to the creditor upon cancellation of the collateral protection insurance but shall not include any placement charges or fees for the collateral protection insurance charged by the creditor.
“Credit agreement” means the open-end or closed-end loan agreement, promissory note, security agreement, sales agreement, line of credit agreement, contract or other document or documents that set forth the terms of the credit transaction.
“Credit transaction” means any transaction pursuant to which a creditor gives consideration for an obligation by a debtor to make payment or repayment at a future date or dates, which obligation is secured in whole or in part by collateral. “Credit transaction” includes, but is not limited to, an advance of money, opening a line of credit, a letter of credit and an installment sale.
“Creditor” means any entity chartered, licensed or otherwise authorized by law to provide credit through a credit transaction and includes successors and assignees of the original creditor.
“Debtor” means a natural person obligated to a creditor pursuant to a credit transaction in which the money, property or services which are the subject of the transaction are primarily for personal, family or household purposes, whether the obligation is primary or secondary, and includes all persons who are successors to a debtor.
L.1999,c.44,s.2.