If a credit union ascertains that insurance required by
Section 30.500 with respect to motor vehicles is not obtainable for a borrower,
a V.S.I. insurance policy may be purchased and the cost may be added to the
borrower's obligation account. In taking such action, the credit union must
comply with the following:
(a) Obtain
at the time the obligation is made (or at any time prior to the purchase of
V.S.I. insurance) a written authorization from the borrower, which will enable
the credit union to purchase V.S.I. insurance and add the cost of the premium
to the borrower's obligation account in the event that such should become
necessary. Such authorization shall include a statement (in 8-point bold type)
in which the borrower acknowledges that such V.S.I. insurance is without
benefit to him individually but is primarily for the protection of the credit
union.
(b) Fifteen days (15) prior
to the purchase of V.S.I. insurance, the credit union must give written notice
to the borrower that it is its intention to procure such insurance (if a dual
coverage policy is not obtained and presented) and that the cost of the V.S.I.
premium will be added to the borrower's obligation account. Evidence of such a
notification must be retained by the credit union in the member's
file.
(c) Upon purchasing a V.S.I.
policy, the credit union must immediately inform the borrower of such action,
including the amount of the premium, the period of the coverage, and the fact
that the premium has been added to his obligation account.
(d) A credit union may obtain a blanket
V.S.I. insurance policy provided the premium is paid for by the credit union
and not by borrowers individually. Where a credit union does have such a
blanket policy in force, signed statements of the borrower ( "Borrower's
Agreement to Provide Insurance" or an equivalent statement), indicating his
intention to obtain an individual policy of insurance from a carrier of his
choice will be considered to be evidence of compliance with Section 30.500 of
this Chapter.
Notes
Cal. Code Regs. Tit.
10, §
30.501
Note: Authority cited: Section
14201,
Financial Code. Reference: Sections 14007,14201, 14204, 14953, 14955 and 15100,
Financial Code.
1. Change without
regulatory effect renumbering and amending former section 943 to new section
30.501 filed 8-19-97 pursuant to section 100, title 1, California Code of
Regulations (Register 97, No. 34).
2. Amendment of first paragraph
and subsection (d) filed 2-27-2003; operative 3-29-2003 (Register 2003, No.
9).
