MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Insurance

By: Senator(s) Horhn

AN ACT TO AMEND SECTION 83-53-17, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE PERSON ENTITLED TO A REFUND OF CREDIT LIFE INSURANCE PREMIUMS SHALL NOT BE REQUIRED BY THE INSURER TO MAKE A REQUEST IN ORDER TO PROMPTLY RECEIVE THE REFUND OR CREDIT; TO PROVIDE THAT GIVING WRITTEN NOTICE TO THE DEBTOR THAT A REFUND OR CREDIT IS DUE SHALL NOT CONSTITUTE COMPLIANCE WITH STATE LAW AND SHALL NOT ABSOLVE THE INSURER OF THE RESPONSIBILITY TO PROMPTLY MAKE THE APPROPRIATE REFUND OR CREDIT; TO PROVIDE THAT THE FORMULA USED IN COMPUTING THE PREMIUM REFUND SHALL BE THE PRO RATA FORMULA; TO REQUIRE THE CREDITOR TO NOTIFY THE INSURER IN WRITING WHEN HE DISCHARGES THE DEBTOR FROM THE INDEBTEDNESS; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 83-53-17, Mississippi Code of 1972, is amended as follows:

83-53-17. (1) Any insurer with the prior approval of the commissioner may revise its schedules of premium rates from time to time and shall file the revised schedules with the commissioner. No insurer shall issue any credit life insurance policy or credit disability insurance policy for which the premium rate exceeds that determined by the schedules of the insurer as previously approved by the commissioner.

(2) Each individual policy or group certificate shall provide that if, through prepayment, renewal or refinancing, the indebtedness is discharged prior to its scheduled maturity date, cancellation of the credit insurance then in force shall be mandatory and any refund of an amount paid by the debtor for insurance shall be paid or credited promptly by the insurer to the person entitled thereto; provided, however, that no refund of less than Two Dollars ($2.00) need be made. The formula to be used in computing the premium refund shall be the * * * "pro rata" formula * * *. Upon the payment of a death benefit under the credit life insurance coverage, the entire premium shall be considered earned and no refund shall be due. The insurer shall pay or cause to be paid to the debtor any refund due pursuant to this subsection (2) within thirty (30) days of the accrual of such refund. The debtor or the person entitled to the refund or credit shall not be required by the insurer to make a request in order to promptly receive the refund or credit. Giving written notice to the debtor that a refund or credit is due shall not constitute compliance with this subsection (2) and shall not absolve the insurer of the responsibility to promptly make the appropriate refund or credit.

(3) Any creditor which discharges a debtor from his indebtedness for any reason shall notify the insurer in writing within ten (10) days from the date of discharge.

(4) The amount required of a debtor for any credit life or credit disability insurance shall not exceed the premium rate allowed to the insurer computed at the time the cost to the debtor is determined. All premiums payable to the insurer less any compensation to the agent or supervising general agent shall be remitted by the agent or supervising general agent to the insurer within sixty (60) days of collection.

(5) The commissioner may promulgate rules whereby an insurer may certify that the policy forms and other documents required to be approved by the commissioner prior to use are in compliance with this chapter.

SECTION 2. This act shall take effect and be in force from and after its passage.