§ 27-30-2 - Scope and definitions. - Rhode Island Statutes

SECTION 27-30-2

   § 27-30-2  Scope and definitions. –(1) This chapter may be cited as "Consumer Credit Insurance Act."

   (2) All consumer credit insurance sold in connection withloans or other credit transactions for personal, family or household purposesshall be subject to the provisions of this chapter except:

   (i) Insurance written in connection with a credit transactionthat is:

   (A) Secured by a first mortgage or deed of trust; and

   (B) Made to finance the purchase of real property or theconstruction of a dwelling thereon, or to refinance a prior credit transactionmade for such a purpose;

   (b) Insurance sold as an isolated transaction on the part ofthe insurer and not related to an agreement or a plan for insuring debtors ofthe creditor.

   (c) Insurance for which no identifiable charge is made to thedebtor.

   (d) Insurance on accounts receivable.

   (e) Definitions. For the purpose of this chapter:

   (1) "Commissioner" means the director of the department ofbusiness regulation or his or designee;

   (2) "Compensation" means commissions, dividends,retrospective rate credits, service fees, expense allowances or reimbursements,gifts, furnishing of equipment, facilities, goods or services, or any otherform of remuneration resulting directly from the sale of consumer creditinsurance;

   (3) "Consumer credit insurance" is a general term used inthis chapter to refer to any or all credit life insurance, credit accident andhealth insurance, credit unemployment insurance specifically defined in thischapter;

   (4) "Credit accident and health insurance" means insurance ona debtor to provide indemnity for payments or debt becoming due on a specificloan or other credit transaction while the debtor is disabled as defined in thepolicy;

   (5) "Credit life insurance" means insurance on a debtor ordebtors, pursuant to or in connection with a specific loan or other credittransaction, to provide for satisfaction of a debt, in whole or in part, uponthe death of an insured debtor;

   (6) "Credit transaction" means any transaction by the termsof which the repayment of money loaned or loan commitment made, or payment forgoods, services or properties sold or leased, is to be made at a future date ordates;

   (7) "Credit unemployment insurance" means insurance on adebtor to provide indemnity for payments or debt becoming due on a specificloan or other credit transaction while the debtor is involuntarily unemployedas defined in the policy;

   (8) "Creditor" means the lender of money or vendor or lessorof goods, services, property, rights, or privileges, for which payment isarranged through a credit transaction or any successor to the right, title, orinterest of any lender, vendor, or lessor, and an affiliate, associate, orsubsidiary of any of them or any director, officer, or employee of any of themor any other person in any way associated with any of them;

   (9) "Debtor" means a borrower of money or a purchaser orlessee of goods, services, property, rights, or privileges for which payment isarranged through a credit transaction;

   (10) "Gross debt" means the sum of the remaining paymentsowed to the creditor by the debtor;

   (11) "Identifiable charge" means a charge for a type ofconsumer credit insurance that is made to debtors having such insurance and notmade to debtors not having such insurance; it includes a charge for insurancethat is disclosed in the credit or other instrument furnished to the debtorwhich sets out the financial elements of the credit transaction and anydifference in the finance, interest, service or other similar charge made todebtors who are in like circumstances except for the insured or non-insuredstatus of the debtor or of the property used as security for the credittransaction;

   (12) "Net debt" means the amount necessary to liquidate theremaining debt in a single lump-sum payment, excluding all unearned interestand other unearned finance charges;

   (13) "Open-end credit" means credit extended by a creditorunder an agreement in which:

   (i) The creditor reasonably contemplates repeatedtransactions;

   (ii) The creditor imposes a finance charge from time to timeon an outstanding unpaid balance; and

   (iii) The amount of credit that may be extended to the debtorduring the term of the agreement (up to any set limit by the creditor) isgenerally made available to the extent that any outstanding balance is repaid.