2012 Connecticut General Statutes
Title 36a - The Banking Law of Connecticut
Chapter 668 - Nondepository Financial Institutions
Section 36a-566 - (Formerly Sec. 36-234). Credit life and accident and health insurance.

(a) Subject to the conditions provided in this section, insurance may be sold to the borrower at his request (1) for insuring the life of persons obligated on a loan pursuant to sections 38a-645 to 38a-658, inclusive, and (2) providing accident and health insurance covering one person on a loan pursuant to sections 38a-645 to 38a-658, inclusive. Credit accident and health insurance shall not provide indemnity against the risk of a borrower becoming disabled for a period of less than fourteen days, except that it may provide for retroactive coverage if the disability continues for the period stated in the policy. Irrespective of the number of obligors only one obligor may be insured, except that life insurance may cover both a borrower and such borrower’s spouse where both are obligors on a loan. A licensee shall not require the purchasing of insurance as a condition precedent to the making of a loan. A licensee shall, both verbally and in writing, inform the borrower prior to his entering into any loan contract of his right not to purchase credit insurance. Any gain or benefit to the licensee directly or indirectly from such insurance or the sale or provision thereof shall not be deemed to be additional or further charges, interest or consideration in connection with a loan made under sections 36a-555 to 36a-573, inclusive, nor a charge in excess of that permitted by said sections.

(b) If a borrower obtains credit accident and health insurance, the borrower shall have the right for a period of fifteen days after the loan is made to cancel the entire insurance coverage. Notification of this right shall be made in the borrower’s insurance election. All persons obligated on the loan must agree in writing to the cancellation and return all certificates. Upon cancellation, the licensee shall, at his option, either refund the insurance charges to the borrower or apply them to the unpaid balance of the loan.

(1957, P.A. 439, S. 5; 1959, P.A. 555; 1963, P.A. 175, S. 3; 1969, P.A. 242, S. 4; P.A. 79-134; P.A. 83-345, S. 1, 2.)

History: 1959 act expanded and clarified insurance refund provisions; 1963 act clarified provision re amount of life insurance required; 1969 act deleted detailed provisions re insurance amounts, charges and refunds and specified that gain or benefit to licensee not deemed additional or excess charges; P.A. 79-134 added exception re coverage of married couple; P.A. 83-345 authorized the providing of accident and health insurance covering one person on a loan, required licensees to inform the borrower of his right not to purchase credit insurance and permitted borrowers to cancel any insurance coverage up to 15 days after the loan is made; Sec. 36-234 transferred to Sec. 36a-566 in 1995.