02-031 C.M.R. ch. 220, § 7 - Amount of insurance

A. For credit life insurance provided in connection with open-end credit, the amount of insurance permitted under Title 24-A M.R.S.A., Section2855(1) (A) shall at no time exceed the balance upon which a finance charge may be imposed, including any (a) principal amounts which the debtor has drawn, or used to make purchases, whether or not these amounts have been charged to the debtor's account, and (b) earned finance or insurance charges which are uncollected or past due.

B. For credit life insurance provided in connection with closed-end credit, the amount of insurance permitted under Title 24-A M.R.S.A., Section2855(1) (A) shall at no time exceed the aggregate of remaining unpaid installments reduced by the value of the unearned finance charge calculated according to the actuarial method.

C. If the benefit under credit life or credit disability insurance will be insufficient to extinguish the amount of indebtedness at the time of death or disability (excluding any indebtedness due only to delinquency in payments by the debtor), this fact must be prominently disclosed in the group certificate or individual policy.

Notes

02-031 C.M.R. ch. 220, § 7