§14A-4-107. Maximum charge by creditor for insurance.
214 words·~1 min read·
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(1)Except as provided in subsection (2), if a creditor contracts for or receives a separate charge for insurance, the amount charged to the debtor for the insurance may not exceed the premium to be charged by the insurer, as computed at the time the charge to the debtor is determined, conforming to any rate filings required by law and made by the insurer with the Insurance Department.
(2)A creditor who provides consumer credit insurance in relation to a revolving charge account (Section 2-108) or revolving loan account (Section 3-108) may calculate the charge to the debtor in each billing cycle by applying the current premium rate to
(a)the average daily unpaid balance of the debt in the
cycle;
(b)the unpaid balance of the debt or a median amount
within a specified range of unpaid balances of debt on
approximately the same day of the cycle. The day of
the cycle need not be the day used in calculating the
credit service charge (Section 2-207) or loan finance
charge (Section 3-201 and Section 3-508A), but the
specified range shall be the range used for that
purpose; or
(c)the unpaid balances of principal calculated according
to the actuarial method. Added by Laws 1969, c. 352, § 4-107, eff. July 1, 1969.