The following provisions apply to loan transfer consolidations:
(1) An offer of new coverage must be made as soon as reasonably possible after the loan transfer. If an offer of new coverage is not made within thirty days after the loan transfer, or at least thirty days prior to the proposed effective date of the new coverage, the insurer shall notify the debtor, in writing, that he has the right to an unconditional refund of all premiums paid for the new coverage as long as he exercises that right, in writing, within thirty days from the date of the notification.
(2) In conjunction with the offer of new coverage, the new insurer shall disclose in writing to each debtor the following:
(a) that the insured debtor may have the right to continue or convert his old coverage by paying premiums directly to the old insurer;
(b) that the offer of new coverage is not conditioned upon either the termination or replacement of the old coverage;
(c) the name and address of the new insurer;
(d) the effective date of the new coverage;
(e) that the financial institution is the primary beneficiary of the new coverage;
(f) whether premium rates under the new plan are guaranteed;
(g) a description of the benefits provided under the new plan;
(h) that payment of the required premium constitutes acceptance of the new coverage.
(3) Disclosures required under this section may be made on behalf of the new insurer by the new servicer.
HISTORY: 1988 Act No. 382, Section 2.