38.2-3719 - Forms of credit life insurance and credit accident and sickness insurance.
§ 38.2-3719. Forms of credit life insurance and credit accident and sicknessinsurance.
A. Credit life insurance and credit accident and sickness insurance shall beissued only in the following forms:
1. Individual policies of life insurance issued to debtors on the term plan;
2. Individual policies of accident and sickness insurance issued to debtorson a term plan or disability benefit provisions in individual policies ofcredit life insurance;
3. Group policies of life insurance issued to creditors providing insuranceupon the lives of debtors on the term plan;
4. Group policies of accident and sickness insurance issued to creditors on aterm plan insuring debtors or disability benefit provisions in group creditlife insurance policies to provide such coverage.
B. A policy of group credit life insurance or group credit accident andsickness insurance may be issued to a creditor or its parent holding companyor to a trustee, trustees or agent designated by two or more creditors, whichcreditor, holding company, affiliate, trustee, trustees or agent shall bedeemed the policyholder, to insure debtors of the creditor or creditors,subject to the following requirements:
1. The debtors eligible for insurance under the policy shall be all of thedebtors of the creditor or creditors, or all of any class or classes of thegroup. The policy may provide that the term "debtors" shall include (i)borrowers of money or purchasers of goods, services or property for whichpayment is arranged through a credit transaction; (ii) the debtors of one ormore subsidiary corporations; and (iii) the debtors of one or more affiliatedcorporations, proprietors or partnerships if the business of the policyholderand of such affiliated corporations, proprietors or partnerships is undercommon control.
2. The premium for the policy shall be paid by the policyholder, either fromthe creditor's funds, or from charges collected from the insured debtors, orfrom both. Except as provided in subdivision 3 of this subsection, a policyon which no part of the premium is to be derived from the collection of suchidentifiable charges must insure all eligible debtors.
3. Credit life insurance and credit accident and sickness insurance must beoffered to all eligible debtors of a creditor except those for whom evidenceof individual insurability is not satisfactory to the insurer.
(Code 1950, § 38-428(6); 1950, p. 1001; 1952, c. 317, § 38.1-480; 1960, c.272, § 38.2-3702; 1962, c. 154; 1975, c. 69; 1982, c. 223, § 38.1-482.3:1;1983, c. 182; 1986, c. 562; 1987, c. 520; 1992, c. 586.)