MISSISSIPPI LEGISLATURE

2000 Regular Session

To: Business and Financial Institutions

By: Senator(s) Dearing

AN ACT TO AMEND SECTION 75-67-121, MISSISSIPPI CODE OF 1972, TO AUTHORIZE LICENSEES UNDER THE SMALL LOAN REGULATORY LAW TO CHARGE BORROWERS FOR BOTH CREDIT LIFE INSURANCE AND NONCREDIT TERM LIFE INSURANCE AS PART OF THE SAME UNDERLYING LOAN UNDER CERTAIN CIRCUMSTANCES; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 75-67-121, Mississippi Code of 1972, is amended as follows:

75-67-121. (1) Any licensee hereunder may charge any borrower on loans of one hundred dollars ($100.00) or more the actual cost of recording any instrument executed as security for a loan; any reasonable fee paid to an attorney for investigating the title to any property given as security for a loan; the actual cost of any premium paid for insurance upon any property given as security for a loan, such insurance to be placed with an insurance company agent of the borrower's selection so long as it is licensed to do business in the State of Mississippi; the actual cost of any premium paid for life, health and/or accident insurance on any borrower where the amount of insurance required is not in excess of the amount of the loan and the premium therefor is in keeping with that usually and customarily paid for like insurance. The licensee shall not charge the borrower for both credit life insurance premiums and noncredit term life insurance premiums as part of the same underlying loan, except as provided in subsection (2) of this section.

(2) Notwithstanding the provisions of subsection (1) of this section, nothing in this article shall limit the amount or type of any noncredit term life insurance policies which a licensee may sell to a borrower, nor the premium for any such insurance, on loans of One Thousand Dollars ($1,000.00) or more, if the following conditions are met:

(a) The total cost of premiums for all insurance purchased in relation to the loan shall not exceed forty-five percent (45%) of the amount financed exclusive of insurance premiums;

(b) The licensee is qualified to do business in the State of Mississippi as provided by Section 83-17-105 et seq.;

(c) The licensee does not require the purchase of the noncredit term life insurance product as a condition of receiving the loan or any extension of credit from the licensee;

(d) The licensee does not make the borrower's ability to obtain any current or future loan or other extension of credit from the licensee contingent upon the borrower's agreement to purchase the noncredit term life insurance product or otherwise transact business with the licensee;

(e) The licensee allows the borrower the option of paying the cost of the noncredit term life insurance product using funds other than the proceeds of a loan obtained from the licensee or having the cost of the noncredit term life insurance product deducted from the proceeds of any loan obtained from the licensee. This subsection shall not apply to sales of credit insurance as provided in subsection (1) of this section.

(3) Whenever he shall find it necessary, the Commissioner of Banking and Consumer Finance shall have the power to adopt and enforce reasonable rules and regulations to prevent the abuse of this section and the making of excessive charges hereunder.

SECTION 2. This act shall take effect and be in force from and after July 1, 2000.