31A-21-109. Debt cancellation agreements and debt suspension agreements.

520 words·~2 min read·/ut/title-31a/chapter-21/31a-21-109

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(1)As used in this section:

(a)"Debt cancellation agreement" means a contract between a lender and a borrower where the lender, for a separately stated consideration, agrees to waive all or part of the debt in the event of a fortuitous event such as death, disability, or the destruction of the lender's collateral.

(b)"Debt suspension agreement" means a contract between a lender and a borrower where the lender, for a separately stated consideration, agrees to suspend scheduled installment payments for an agreed period of time in the event of a:

(i)fortuitous event such as involuntary unemployment or accident; or

(ii)fortuitous condition such as sickness.

(c)"Guaranteed asset protection waiver" is as defined in Section 31A-6b-102 .

(d)"Institution" means:

(i)a bank as defined in Section 7-1-103 ;

(ii)a credit union as defined in Section 7-1-103 ;

(iii)an industrial bank as defined in Section 7-1-103 ; or

(iv)a savings and loan association as defined in Section 7-1-103 .

(e)"Regulate the issuance" includes regulation of the following with respect to a debt cancellation agreement or a debt suspension agreement:

(i)terms;

(ii)conditions;

(iii)rates;

(iv)forms; and

(v)claims.

(f)"Subsidiary" is as defined in Section 7-1-103 .

(2)Except as provided in Subsection

(6), the commissioner has sole jurisdiction over the regulation of a debt cancellation agreement or debt suspension agreement.

(3)Subject to this section, the commissioner may by rule, made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act :

(a)authorize an insurer to issue:

(i)a debt cancellation agreement; or

(ii)a debt suspension agreement; and

(b)regulate the issuance of:

(i)a debt cancellation agreement; or

(ii)a debt suspension agreement.

(4)Except as provided in Subsection

(6), a debt cancellation agreement or a debt suspension agreement may be issued only by an insurer authorized to issue a debt cancellation agreement or debt suspension agreement under this section.

(a)The rules promulgated by the commissioner under this section shall regulate the issuance of a debt cancellation agreement or debt suspension agreement according to the functional insurance equivalent of each type of debt cancellation agreement or debt suspension agreement.

(b)Except as provided in Subsection (5)(c) , in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act , the commissioner may by rule determine the functional insurance equivalent of each type of debt cancellation agreement or debt suspension agreement.

(c)Notwithstanding Subsection (5)(b) , the functional insurance equivalent of a debt cancellation agreement that provides for the cancellation of indebtedness at death is credit life insurance.

(6)Notwithstanding the other provisions of this section, the issuance of a debt cancellation agreement or a debt suspension agreement by an institution or a subsidiary of an institution is:

(a)not subject to this section; and

(b)subject to the jurisdiction of the primary regulator of:

(i)the institution; or

(ii)the subsidiary of an institution.

(7)This section does not apply to a guaranteed asset protection waiver.

Amended by Chapter 274 , 2010 General Session