Amount of Insurance

1. Law
2. Georgia Code
3. Insurance
4. Credit Life Insurance and Credit Accident and Sickness Insurance
5. Amount of Insurance

1. The amount of credit life insurance shall not exceed the indebtedness. Where indebtedness repayable in substantially equal installments is secured by an individual policy of credit life insurance, the amount of insurance shall not exceed the approximate unpaid indebtedness on the date of death and, where secured by a group policy of credit life insurance, shall not exceed the exact amount of unpaid indebtedness on that date.
2. The amount of indemnity payable by credit accident and sickness insurance in the event of disability, as defined in the policy, shall not exceed the aggregate of the periodic scheduled unpaid installments of indebtedness; and the amount of each periodic indemnity payment shall not exceed the original indebtedness divided by the number of periodic installments.
3. The limitations set forth in subsections (a) and (b) of this Code section shall not apply to insurance regulated under Chapter 3 of Title 7 as to loans made under that chapter.
4. Notwithstanding this Code section, credit life insurance in connection with agricultural loans not exceeding five years may be written up to the amount of the loan or loan commitment on the nondecreasing or level term plan.

(Code 1933, § 56-3304, enacted by Ga. L. 1960, p. 289, § 1.)

Law reviews.

- For article discussing methods of computation of finance charges in Georgia consumer credit contracts, see 30 Mercer L. Rev. 281 (1978).

JUDICIAL DECISIONS

Insurable interest may not exceed indebtedness to be secured.

- Creditor has, for the purpose of indemnification against loss, but for no other, an insurable interest in the life of a debtor; and this interest cannot exceed in amount that of the indebtedness to be secured. Such indebtedness may, however, include the cost of taking out and keeping up the insurance, if made a charge against the debtor or the debtor's estate, or upon the proceeds of the policy when collected. Vulcan Life & Accident Ins. Co. v. United Banking Co., 118 Ga. App. 36, 162 S.E.2d 798 (1968).

Indebtedness is the total amount a consumer would pay over the course of the loan.

- Insurance company did not illegally overcharge a policy holder for a credit life policy on a vehicle loan, because under O.C.G.A. § 33-31-1, indebtedness was defined as the total amount payable by a debtor to a creditor in connection with a loan or other credit transaction, and this included the interest charged on the vehicle loan. Printis v. Bankers Life Ins. Co., 256 Ga. App. 266, 568 S.E.2d 85 (2002), aff'd, 276 Ga. 697, 583 S.E.2d 22 (2003).

RICO action against an insurer regarding the insurer's calculation of the premium for a credit life insurance policy issued in connection with an installment loan failed to state a cause of action under O.C.G.A. § 9-11-12(c) because applying the definition of "indebtedness" found in O.C.G.A. § 33-31-1(5) to the language in O.C.G.A. § 33-31-4(a), the insurer properly calculated the premium based on the total payments due through the life of the loan, a gross balance decreasing term coverage method. Printis v. Bankers Life Ins. Co., 276 Ga. 697, 583 S.E.2d 22 (2003).

Cited in Mason v. Service Loan & Fin. Co., 128 Ga. App. 828, 198 S.E.2d 391 (1973); Turpeau v. Fidelity Fin. Servs., Inc., 936 F. Supp. 975 (N.D. Ga. 1996).

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