Table of Contents Sec. 38a-645. (Formerly Sec. 38-249). Applicability. The provisions of sections
38a-645 to 38a-658, inclusive, shall apply to all life insurance and all accident and health
insurance sold in connection with loans or other credit transactions except that sections
38a-647 to 38a-650, inclusive, shall not apply to insurance sold in connection with real
estate first mortgage loans and except that sections 38a-645 to 38a-658, inclusive, shall
not apply to insurance where the issuance of such insurance is an isolated transaction
on the part of the insurer not related to an agreement or a plan for insuring debtors of
the creditor; but said provisions shall not apply to insurance for which no charge is made
to the debtor. The commissioner may grant exemptions from any or all of the provisions
of sections 38a-645 to 38a-658, inclusive, where he determines such exemptions to be
not contrary to the public interest. Sec. 38a-646. (Formerly Sec. 38-250). Definitions. As used in sections 38a-645
to 38a-658, inclusive, except as otherwise provided herein: Sec. 38a-647. (Formerly Sec. 38-251). Forms of insurance. Credit life insurance
and credit accident and health insurance shall be issued only in the following forms: (a)
Individual policies of life insurance issued to debtors on the term plan; (b) individual
policies of accident and health insurance issued to debtors on a term plan or disability
benefit provisions in individual policies of credit life insurance; (c) group policies of
life insurance issued to creditors providing insurance upon the lives of debtors on the
term plan; (d) group policies of accident and health insurance issued to creditors on a
term plan insuring debtors or disability benefit provisions in group credit life insurance
policies to provide such coverage. Sec. 38a-648. (Formerly Sec. 38-252). Allowable amount of insurance. (a) The
amount of credit life insurance shall not exceed the initial indebtedness. Where an indebtedness repayable in substantially equal installments is secured by an individual policy
of credit life insurance, the amount of insurance shall at no time exceed the scheduled
amount of indebtedness and, where secured by a group policy of credit life insurance,
shall at no time exceed the amount of unpaid indebtedness. Sec. 38a-649. (Formerly Sec. 38-253). Term of insurance. The term of any credit
life insurance or credit accident and health insurance shall, subject to the acceptance of
the insurer, commence on the date when the debtor becomes obligated to the creditor,
except that, where a group policy provides coverage with respect to existing obligations,
the insurance on a debtor with respect to such indebtedness shall commence on the
effective date of the policy. The term of such insurance shall not extend more than fifteen
days beyond the scheduled maturity date of the indebtedness except when extended
without additional cost to the debtor. If the indebtedness is discharged due to renewal
or refinancing prior to the scheduled maturity date, the insurance in force shall be terminated before any new insurance may be issued in connection with the renewed or refinanced indebtedness. In all cases of termination prior to scheduled maturity, a refund
shall be paid or credited as provided in section 38a-652. Sec. 38a-650. (Formerly 38-254). Policy or certificate requirements. (a) All
credit life insurance and credit accident and health insurance sold shall be evidenced
by an individual policy or, in the case of group insurance, by a certificate of insurance,
which individual policy or group certificate of insurance shall be delivered to the debtor. Sec. 38a-651. (Formerly Sec. 38-255). Filing of policies, certificates, riders
with commissioner. Disapproval. (a) All policies, certificates of insurance, notices of
proposed insurance, applications for insurance, endorsements and riders delivered in
this state shall be filed with the commissioner. Sec. 38a-652. (Formerly Sec. 38-256). Filing of rates. (a) Each insurer issuing
credit life insurance or credit accident and health insurance shall file with the commissioner its schedules of premium rates for use in connection with such insurance. Any
insurer may revise such schedules from time to time and shall file such revised schedules
with the commissioner. No insurer shall issue any credit life insurance policy or credit
accident and health insurance policy with a premium rate exceeding the schedules of
such insurer then on file with the commissioner. The commissioner may require the
filing of the schedule of premium rates for use in connection with and as a part of the
specific policy filings as provided in section 38a-651. Sec. 38a-653. (Formerly Sec. 38-257). Policies to be delivered or issued only
by authorized insurers. All policies of credit life insurance and credit accident and
health insurance shall be delivered or issued for delivery in this state only by an insurer
authorized to do insurance business therein, and shall be issued only through holders
of licenses issued by the commissioner. Sec. 38a-654. (Formerly Sec. 38-258). Processing of claims. (a) All claims shall
be promptly reported to the insurer or its designated claim representative, and the insurer
shall maintain adequate claim files. All claims shall be settled as soon as reasonably
possible and in accordance with the terms of the insurance contract. Sec. 38a-655. (Formerly Sec. 38-259). Option of debtor in furnishing insurance. When credit life insurance or credit accident and health insurance is required as
additional security for any indebtedness, the debtor shall, upon request to the creditor,
have the option of furnishing the required amount of insurance through existing policies
of insurance owned or controlled by him or of procuring and furnishing the required
coverage through any insurer authorized to transact an insurance business within this
state. Sec. 38a-656. (Formerly Sec. 38-260). Regulations. Enforcement. The commissioner may issue such regulations as are necessary for the implementation of sections
38a-645 to 38a-658, inclusive. Whenever the commissioner finds that there has been a
violation of said sections or of any regulations issued pursuant thereto, after written
notice thereof and hearing given to the affected party or parties, the commissioner shall
set forth the details of his findings together with an order for compliance by a specified
date. Such order shall be binding on such party or parties on the date specified unless
sooner withdrawn by the commissioner or unless a stay thereof has been ordered by a
court of competent jurisdiction. Sec. 38a-657. (Formerly Sec. 38-261). Appeals. Any party aggrieved by an order
or decision of the commissioner may appeal therefrom in accordance with the provisions
of section 4-183, except venue for such appeal shall be in the judicial district of New
Britain. Sec. 38a-658. (Formerly Sec. 38-262). Penalty. Any person, firm or corporation
violating any provision of sections 38a-645 to 38a-658, inclusive, shall be fined not
more than two hundred and fifty dollars or imprisoned not more than two years or both.
The commissioner may revoke or suspend the license or certificate of authority of the
person guilty of such violation. Such order for suspension or revocation shall be after
notice and hearing, and shall be subject to judicial review as provided in section 38a-657.
Sec. 38a-645. (Formerly Sec. 38-249). Applicability.
Sec. 38a-646. (Formerly Sec. 38-250). Definitions.
Sec. 38a-647. (Formerly Sec. 38-251). Forms of insurance.
Sec. 38a-648. (Formerly Sec. 38-252). Allowable amount of insurance.
Sec. 38a-649. (Formerly Sec. 38-253). Term of insurance.
Sec. 38a-650. (Formerly 38-254). Policy or certificate requirements.
Sec. 38a-651. (Formerly Sec. 38-255). Filing of policies, certificates, riders with commissioner. Disapproval.
Sec. 38a-652. (Formerly Sec. 38-256). Filing of rates.
Sec. 38a-653. (Formerly Sec. 38-257). Policies to be delivered or issued only by authorized insurers.
Sec. 38a-654. (Formerly Sec. 38-258). Processing of claims.
Sec. 38a-655. (Formerly Sec. 38-259). Option of debtor in furnishing insurance.
Sec. 38a-656. (Formerly Sec. 38-260). Regulations. Enforcement.
Sec. 38a-657. (Formerly Sec. 38-261). Appeals.
Sec. 38a-658. (Formerly Sec. 38-262). Penalty.
Sec. 38a-659.
(1959, P.A. 576, S. 1; 1967, P.A. 416; 1969, P.A. 242, S. 8.)
History: 1967 act substituted new exception for "except such insurance sold in connection with a loan or other credit
transaction of more than five years' duration" and authorized commissioner to grant exemptions from chapter provisions
where he determines exemptions would not be contrary to public interest; 1969 act deleted statement that chapter provisions
shall not affect requirements of Sec. 36-234; Sec. 38-249 transferred to Sec. 38a-645 in 1991.
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(1) "Credit life insurance" means insurance on the life of a debtor pursuant to or in
connection with a specific loan or other credit transaction;
(2) "Credit accident and health insurance" means insurance on a debtor to provide
indemnity for payments becoming due on a specific loan or other credit transaction
while the debtor is disabled as defined in the policy;
(3) "Creditor" means the lender of money or vendor or lessor of goods, services,
property, rights or privileges for which payment is arranged through a credit transaction
or any successor to the right, title or interest of any such lender, vendor or lessor, and
an affiliate, associate or subsidiary of any of them or any director, officer or employee
of any of them or any other person in any way associated with any of them;
(4) "Debtor" means a borrower of money or a purchaser or lessee of goods, services,
property, rights or privileges for which payment is arranged through a credit transaction;
(5) "Indebtedness" means the total amount payable by a debtor to a creditor in
connection with a loan or other credit transaction.
(1959, P.A. 576, S. 2; P.A. 00-105, S. 4, 5.)
History: Sec. 38-250 transferred to Sec. 38a-646 in 1991; P.A. 00-105 substituted numeric Subdiv. designators for
alphabetic designators, effective July 1, 2000.
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(1959, P.A. 576, S. 3.)
History: Sec. 38-251 transferred to Sec. 38a-647 in 1991.
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(b) The amount of periodic indemnity payable by credit accident and health insurance in the event of disability, as defined in the policy, shall not exceed the aggregate
of the periodic scheduled unpaid installments of indebtedness or shall not exceed the
original indebtedness divided by the number of periodic installments.
(1959, P.A. 576, S. 4.)
History: Sec. 38-252 transferred to Sec. 38a-648 in 1991.
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(1959, P.A. 576, S. 5.)
History: Sec. 38-253 transferred to Sec. 38a-649 in 1991.
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(b) Each individual policy or group certificate of credit life insurance or credit accident and health insurance shall, in addition to other requirements of law, set forth the
name and home-office address of the insurer, the name or names of the debtor, the
premium or amount of payment, if any, by the debtor separately for credit life insurance
and credit accident and health insurance, a description of the coverage including the
amount and term thereof, and any exceptions, limitations or restrictions, and shall state
that the benefits shall be paid to the creditor to reduce or extinguish the unpaid indebtedness and, wherever the amount of insurance may exceed the unpaid indebtedness, that
any such excess shall be payable to a beneficiary, other than the creditor, named by the
debtor or to his estate.
(c) Such individual policy or group certificate of insurance shall be delivered to the
insured debtor at the time the indebtedness is incurred except as hereinafter provided.
(d) If such individual policy or group certificate of insurance is not delivered to the
debtor at the time the indebtedness is incurred, a copy of the application for such policy
signed by the debtor or a notice of proposed insurance, setting forth the name or names
of the debtor, the premium rate or amount of payment by the debtor, if any, separately
for credit life insurance and credit accident and health insurance, the amount, term and
a brief description of the coverage provided, shall be delivered to the debtor at the time
such indebtedness is incurred. The copy of the application for or notice of proposed
insurance shall refer exclusively to insurance coverage and shall be separate and apart
from the loan, sale or other credit statement of account, instrument or agreement, unless
the information required by this subsection is prominently set forth therein. Upon acceptance of the insurance by the insurer and within fifteen days of the date upon which the
indebtedness is incurred, the insurer shall deliver the individual policy or group certificate of insurance to the debtor. Such application or notice of proposed insurance shall
state that, upon acceptance by the insurer, the insurance shall become effective as of
the date the indebtedness is incurred.
(1959, P.A. 576, S. 6.)
History: Sec. 38-254 transferred to Sec. 38a-650 in 1991.
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(b) The commissioner shall adopt regulations in accordance with the provisions of
chapter 54, establishing a procedure for review of such policies, certificates of insurance,
notices of proposed insurance, applications for insurance, endorsements and riders, and
shall disapprove any such form at any time if the schedule of premium rates charged or
to be charged is by reasonable assumptions excessive in relation to the benefits provided
or if it contains provisions which are unjust, unfair, inequitable, misleading, deceptive
or which encourage misrepresentation of the coverage or which are contrary to any
provision of the insurance laws or of any rule or regulation promulgated thereunder.
(c) If the commissioner issues an order disapproving the use of such form, such
insurer shall not thereafter issue or use such form. In such notice, the commissioner
shall specify the reason for his order of disapproval. The provisions of section 38a-19
shall apply to any such order issued by the commissioner.
(1959, P.A. 576, S. 7; P.A. 88-326, S. 8.)
History: P.A. 88-326 required the commissioner to adopt regulations establishing a procedure for review of policies
and certificates, and rephrased existing provisions; Sec. 38-255 transferred to Sec. 38a-651 in 1991.
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(b) Each individual policy, group certificate or notice of proposed insurance shall
provide that, in the event of termination of the insurance prior to the scheduled maturity
date of the indebtedness, any refund of an amount paid by the debtor on insurance shall
be paid or credited promptly to the person entitled thereto; provided the commissioner
shall prescribe a minimum refund and no refund which would be less than such minimum
need be made. The formula to be used in computing such refund shall be filed with and
approved by the commissioner.
(c) If a creditor requires a debtor to make any payment for credit life insurance or
credit accident and health insurance and an individual policy or group certificate of
insurance is not issued, the creditor shall immediately give written notice to such debtor
and shall apply such payment to the next succeeding payment or payments on the debt.
(d) The amount charged by the creditor to the debtor for any credit life or credit
health and accident insurance shall not exceed the cost of such insurance computed at
the premium rate filed with the commissioner to be effective at the time the charge to
the debtor is determined for the coverage provided.
(e) Nothing in sections 38a-645 to 38a-658, inclusive, shall be construed to authorize any payments for insurance now prohibited under any statute or regulation governing credit transactions.
(1959, P.A. 576, S. 8.)
History: Sec. 38-256 transferred to Sec. 38a-652 in 1991.
Annotations to former section 38-256:
Subsec. (b):
Cited. 24 CA 455, 463.
Annotations to present section:
Subsec. (b):
Cited. 24 CA 455, 463.
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(1959, P.A. 576, S. 9.)
History: Sec. 38-257 transferred to Sec. 38a-653 in 1991.
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(b) All claims shall be paid either by draft drawn upon the insurer or by check of
the insurer to the order of the claimant to whom payment of the claim is due pursuant
to the policy provisions, or upon direction of such claimant to any person specified.
(c) No plan or arrangement shall be used whereby any person, firm or corporation
other than the insurer or its designated claim representative shall be authorized to settle
or adjust claims. The creditor shall not be designated as claim representative for the
insurer in adjusting claims; provided a group policyholder may, by arrangement with
the group insurer, draw drafts or checks in payment of claims due the group policyholder
subject to audit and review by the insurer.
(1959, P.A. 576, S. 10.)
History: Sec. 38-258 transferred to Sec. 38a-654 in 1991.
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(1959, P.A. 576, S. 11.)
History: Sec. 38-259 transferred to Sec. 38a-655 in 1991.
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(1959, P.A. 576, S. 12.)
History: Sec. 38-260 transferred to Sec. 38a-656 in 1991.
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(1959, P.A. 576, S. 13; P.A. 77-603, S. 119, 125; P.A. 78-280, S. 6, 127; P.A. 88-230, S. 1, 12; P.A. 90-98, S. 1, 2;
P.A. 93-142, S. 4, 7, 8; P.A. 95-220, S. 4−6; P.A. 99-215, S. 24, 29.)
History: P.A. 77-603 replaced previous detailed appeal provisions with statement requiring that appeals be made in
accordance with Sec. 4-183, but retaining venue in Hartford county; P.A. 78-280 substituted "judicial district of Hartford-
New Britain" for "Hartford county"; P.A. 88-230 replaced "judicial district of Hartford-New Britain" with "judicial district
of Hartford", effective September 1, 1991; P.A. 90-98 changed the effective date of P.A. 88-230 from September 1, 1991,
to September 1, 1993; Sec. 38-261 transferred to Sec. 38a-657 in 1991; P.A. 93-142 changed the effective date of P.A.
88-230 from September 1, 1993, to September 1, 1996, effective June 14, 1993; P.A. 95-220 changed the effective date
of P.A. 88-230 from September 1, 1996, to September 1, 1998, effective July 1, 1995; P.A. 99-215 replaced "judicial
district of Hartford" with "judicial district of New Britain", effective June 29, 1999.
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(1959, P.A. 576, S. 14.)
History: Sec. 38-262 transferred to Sec. 38a-658 in 1991.
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