TITLE XXXVII
INSURANCE

Chapter 408-A
CREDIT LIFE AND ACCIDENT AND HEALTH INSURANCE

Section 408-A:1

    408-A:1 Purpose. – The purpose of this chapter is to promote the public welfare by regulating credit life insurance and credit accident and health insurance. Nothing in this chapter is intended to prohibit or discourage reasonable competition. The provisions of this chapter shall be liberally construed.

Source. 1959, 66:1, eff. June 22, 1959.

Section 408-A:2

    408-A:2 Scope and Definitions. –
I. This chapter may be cited as "The Model Act for the Regulation of Credit Life Insurance and Credit Accident and Health Insurance."
II. All life insurance and all accident and health insurance sold in connection with loans or other credit transactions shall be subject to the provisions of this chapter except such insurance sold in connection with:
(a) A loan or other credit transaction of more than 15 years' duration; or
(b) A first real estate mortgage; or
(c) A loan secured by a filing under the Uniform Commercial Code pursuant to RSA 477:44, IV.
III. For the purpose of this chapter:
(a) "Credit life insurance" means insurance on the life of a debtor pursuant to or in connection with a specific loan or other credit transaction;
(b) "Credit accident and health insurance" means insurance on a debtor to provide indemnity for payments becoming due on a specific loan or other credit transaction while the debtor is disabled as defined in the policy;
(c) "Creditor" means the lender of money or vendor or lessor of goods, services, property, rights or privileges, for which payment is arranged through a credit transaction or any successor to the right, title or interest of any such lender, vendor, or lessor, and an affiliate, associate or subsidiary of any of them or any director, officer, or employee of any of them or any other person in any way associated with any of them;
(d) "Debtor" means a borrower of money or a purchaser or lessee of goods, services, property, rights or privileges for which payment is arranged through a credit transaction;
(e) "Indebtedness" means the total amount payable by a debtor to a creditor in connection with a loan or other credit transaction, except, with respect to credit life insurance issued in connection with a loan or other credit transaction with terms greater than 75 months, "indebtedness" shall mean only the amount necessary to liquidate the remaining debt of a debtor in a single lump sum payment, excluding any unearned interest, unearned finance charges, late charges, or past due amounts more than 2 months delinquent. This exception shall not apply to leases;
(f) "Commissioner" means the insurance commissioner of the state of New Hampshire;
(g) "Credit unemployment insurance" means insurance on a debtor to provide indemnity for payments becoming due on a specific loan or other credit transaction while the debtor is unemployed or on leave as defined in the policy.

Source. 1959, 66:1. 1973, 585:2. 1977, 406:1. 1985, 259:1. 1998, 385:1. 2000, 243:1, 2, eff. Aug. 7, 2000.

Section 408-A:3

    408-A:3 Forms of Credit Life Insurance and Credit Accident and Health Insurance. –
Credit life insurance and credit accident and health insurance shall be issued only in the following forms:
I. Individual policies of life insurance issued to debtors on the term plan;
II. Individual policies of accident and health insurance issued to debtors on a term plan or disability benefit provisions in individual policies of credit life insurance;
III. Group policies of life insurance issued to creditors providing insurance upon the lives of debtors on the term plan;
IV. Group policies of accident and health insurance issued to creditors on a term plan insuring debtors or disability benefit provisions in group credit life insurance policies to provide such coverage.

Source. 1959, 66:1, eff. June 22, 1959.

Section 408-A:4

    408-A:4 Amount of Credit Life Insurance and Credit Accident and Health Insurance. –
I.
Credit Life Insurance. The amount of credit life insurance shall not exceed the initial indebtedness. Where an indebtedness repayable in substantially equal installments is secured by an individual policy of credit life insurance, the amount of insurance shall at no time exceed the scheduled amount of indebtedness, and where secured by a group policy of credit life insurance, shall at no time exceed the amount of unpaid indebtedness.
II.
Credit Accident and Health Insurance. The total amount of indemnity payable by credit accident and health insurance in the event of disability, as defined in the policy, shall not exceed the aggregate of the periodic scheduled unpaid installments of the indebtedness; and the amount of each periodic indemnity payment shall not exceed the original indebtedness divided by the number of periodic installments.

Source. 1959, 66:1, eff. June 22, 1959.

Section 408-A:5

    408-A:5 Term of Credit Life Insurance and Credit Accident and Health Insurance. – The term of any credit life insurance or credit accident and health insurance shall, subject to acceptance by the insurer, commence on the date when the debtor becomes obligated to the creditor, or the date from which interest or finance charges accrue if later, except that, where a group policy provides coverage with respect to existing obligations, the insurance on a debtor with respect to such indebtedness shall commence on the effective date of the policy. Where evidence of insurability is required and such evidence is furnished more than 30 days after the date when the debtor becomes obligated to the creditor, the term of the insurance may commence on the date on which the insurance company determines the evidence to be satisfactory, and in such event there shall be an appropriate refund or adjustment of any charge to the debtor for insurance. The term of such insurance shall not extend more than 15 days beyond the scheduled maturity date of the indebtedness except when extended without additional cost to the debtor. If the indebtedness is discharged due to renewal or refinancing prior to the scheduled maturity date, the insurance in force shall be terminated before any new insurance may be issued in connection with the renewed or refinanced indebtedness. In all cases of termination prior to scheduled maturity, a refund shall be paid or credited as provided in RSA 408-A:8.

Source. 1959, 66:1, eff. June 22, 1959.

Section 408-A:5-a

    408-A:5-a Credit Unemployment Insurance. – Credit unemployment insurance may be sold in connection with loans or other credit transactions, subject to the provisions of this chapter as applied to credit life insurance and credit accident and health insurance. Any insurer authorized to offer the coverage specified by this chapter may sell credit unemployment insurance pursuant to this chapter.

Source. 2000, 243:3, eff. Aug. 7, 2000.

Section 408-A:6

    408-A:6 Provisions of Policies and Certificates of Insurance; Disclosure to Debtors. –
I. All credit life insurance and credit accident and health insurance sold shall be evidenced by an individual policy, or in the case of group insurance by a certificate of insurance, which individual policy or group certificate of insurance shall be delivered to the debtor.
II. Each individual policy or group certificate of credit life insurance, and/or credit accident and health insurance shall, in addition to other requirements of law, set forth the name and home office address of the insurer, and the identity by name or otherwise of the person or persons insured, the rate or amount of payment, if any, by the debtor separately for credit life insurance and credit accident and health insurance, a description of the amount, term and coverage including any exceptions, limitations or restrictions, and shall state that the benefit shall be paid to the creditor to reduce or extinguish the unpaid indebtedness and, wherever the amount of insurance may exceed the unpaid indebtedness, that any such excess shall be payable to a beneficiary, other than the creditor, named by the debtor or to his estate.
III. Said individual policy or group certificate of insurance shall be delivered to the insured debtor at the time the indebtedness is incurred except as hereinafter provided.
IV. If said individual policy or group certificate of insurance is not delivered to the debtor at the time the indebtedness is incurred, a copy of the application for such policy or a notice of proposed insurance, signed by the debtor and setting forth the name and home office address of the insurer, the identity by name or otherwise of the person or persons insured, the rate or amount of payment by the debtor, if any, separately for credit life insurance and credit accident and health insurance, a description of the amount, term and coverage provided, shall be delivered to the debtor at the time such indebtedness is incurred. The copy of the application for, or notice of proposed insurance, shall refer exclusively to insurance coverage, and shall be separate and apart from the loan, sale or other credit statement of account, instrument or agreement, unless the information required by this paragraph is prominently set forth therein. Upon acceptance of the insurance by the insurer and within 30 days of the date upon which the indebtedness is incurred, the insurer shall cause the individual policy or group certificate of insurance to be delivered to the debtor. Said application or notice of proposed insurance shall state that upon acceptance by the insurer, the insurance shall become effective as provided in RSA 408-A:5.

Source. 1959, 66:1, eff. June 22, 1959.

Section 408-A:7

    408-A:7 Filing, Approval and Withdrawal of Forms. –
I. All policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements and riders shall be filed with the commissioner of the state in which the policy is issued.
II. The commissioner shall within 30 days after the filing of any such policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements and riders, disapprove any such form if the table of premium rates charged or to be charged appears by reasonable assumptions to be excessive in relation to benefits, or if it contains provisions which are unjust, unfair, inequitable, misleading, deceptive or encourage misrepresentation of the coverage, or are contrary to any provision of the insurance code or any rule or regulation promulgated thereunder.
III. If the commissioner notifies the insurer that the form is disapproved it is unlawful thereafter for such insurer to issue or use such form. In such notice, the commissioner shall specify the reason for his disapproval and state that a hearing will be granted within 20 days after request in writing by the insurer. No such policy, certificate of insurance, notice of proposed insurance, nor any application, endorsement or rider, shall be issued or used until the expiration of 30 days after it has been so filed, unless the commissioner shall give his prior written approval thereto.
IV. The commissioner may, at any time after a hearing held not less than 20 days after written notice to the insurer, withdraw his approval of any such form on any ground set forth in paragraph II above. The written notice of such hearing shall state the reason for the proposed withdrawal.
V. It is not lawful for the insurer to issue such forms or use them after the effective date of such withdrawal.
VI. Any order or final determination of the commissioner under the provisions of this section shall be subject to judicial review.

Source. 1959, 66:1, eff. June 22, 1959.

Section 408-A:8

    408-A:8 Premiums and Refunds. –
I. Each insurer issuing credit life insurance or credit accident and health insurance shall file with the commissioner its schedules of premium rates for use in connection with such insurance. Any insurer may revise such schedules from time to time, and shall file such revised schedules with the commissioner. No insurer shall issue any credit life insurance policy or credit accident and health insurance policy for which the premium rate exceeds that determined by the schedules of such insurer as then on file with the commissioner. The commissioner may require the filing of the schedule of premium rates for use in connection with and as a part of the specific policy filings as provided by RSA 408-A:7.
II. Each individual policy, group certificate or notice of proposed insurance shall provide that in the event of termination of the insurance prior to the scheduled maturity date of the indebtedness, any refund of an amount paid by the debtor for insurance shall be paid or credited promptly to the person entitled thereto within 30 days from the termination of the insurance; provided, however, that the commissioner shall prescribe a minimum refund and no refund which would be less than such minimum need be made. The formula to be used in computing such refund shall be filed with and approved by the commissioner. For any refund which is not paid within this 30-day period, the person to whom the premium is owed shall be entitled to interest beginning on day 31, at the legal rate.
II-a. [Repealed.]
II-b. [Repealed.]
III. If a creditor requires a debtor to make any payment for credit life insurance or credit accident and health insurance and an individual policy or group certificate of insurance is not issued, the creditor shall immediately give written notice to such debtor and shall promptly make an appropriate credit to the account.
IV. The amount charged to a debtor for credit life or credit health and accident insurance shall not exceed the premium charged by the insurer, as computed at the time the charge to the debtor is determined.

Source. 1959, 66:1. 1988, 221:2. 1989, 173:2, eff. July 1, 1989.

Section 408-A:9

    408-A:9 Issuance of Policies. – All policies of credit life insurance and credit accident and health insurance shall be delivered or issued for delivery in this state only by an insurer authorized to do an insurance business therein, and shall be issued only through holders of licenses or authorizations issued by the commissioner unless the sale is by a financial institution pursuant to RSA 406-C.

Source. 1959, 66:1, eff. June 22, 1959. 2022, 223:6, eff. Aug. 16, 2022.

Section 408-A:10

    408-A:10 Claims. –
I. All claims shall be promptly reported to the insurer or its designated claim representative, and the insurer shall maintain adequate claim files. All claims shall be settled as soon as possible and in accordance with the terms of the insurance contract.
II. All claims shall be paid either by draft drawn upon the insurer or by check of the insurer to the order of the claimant to whom payment of the claim is due pursuant to the policy provisions, or upon direction of such claimant to one specified.
III. No plan or arrangement shall be used whereby any person, firm or corporation other than the insurer or its designated claim representative shall be authorized to settle or adjust claims. The creditor shall not be designated as claim representative for the insurer in adjusting claims; provided, that a group policyholder may, by arrangement with the group insurer, draw drafts or checks in payment of claims due to the group policyholder subject to audit and review by the insurer.

Source. 1959, 66:1, eff. June 22, 1959.

Section 408-A:11

    408-A:11 Existing Insurance, Choice of Insurer. – When credit life insurance or credit accident and health insurance is required as additional security for any indebtedness, the debtor shall, upon request to the creditor, have the option of furnishing the required amount of insurance through existing policies of insurance owned or controlled by him or of procuring and furnishing the required coverage through any insurer authorized to transact an insurance business within this state.

Source. 1959, 66:1, eff. June 22, 1959.

Section 408-A:12

    408-A:12 Enforcement. – The commissioner may, after notice and hearing, issue such rules and regulations as he deems appropriate for the supervision of this chapter. Whenever the commissioner finds that there has been a violation of this chapter or any rules or regulations issued pursuant thereto, and after written notice thereof and hearing given to the insurer or other person authorized or licensed by the commissioner, he shall set forth the details of his findings together with an order for compliance by a specified date. Such order shall be binding on the insurer and other person authorized or licensed by the commissioner on the date specified unless sooner withdrawn by the commissioner or a stay thereof has been ordered by a court of competent jurisdiction.

Source. 1959, 66:1, eff. June 22, 1959.

Section 408-A:13

    408-A:13 Judicial Review. – Any party to the proceeding affected by an order of the commissioner shall be entitled to a rehearing and appeal in accordance with the provisions of RSA 541.

Source. 1959, 66:1, eff. June 22, 1959.

Section 408-A:14

    408-A:14 Penalties. – In addition to any other penalty provided by law, any person who violates an order of the commissioner after it has become final, and while such order is in effect, shall, upon proof thereof to the satisfaction of the court, forfeit and pay to the state of New Hampshire a sum not to exceed $250 which may be recovered in a civil action, except that if such violation is found to be willful, the amount of such penalty shall be a sum not to exceed $1,000. The commissioner, in his discretion, may revoke or suspend the license or certificate of authority of the person guilty of such violation. Such order for suspension or revocation shall be upon notice and hearing, and shall be subject to judicial review as provided in RSA 408-A:13.

Source. 1959, 66:1, eff. June 22, 1959.

Section 408-A:15

    408-A:15 Separability Provision. – If any provision of this chapter, or the application of such provision of any person or circumstances, shall be held invalid, the remainder of the chapter, and the application of such provision to any person or circumstances other than those as to which it is held invalid, shall not be affected thereby.

Source. 1959, 66:1, eff. June 22, 1959.