Section 30. Purchaser's right to cancel insurance

Any person who purchases noncredit-related life insurance solicited in a consumer finance office shall have a right to cancel such purchase and receive a full premium refund until midnight of the 30th day after receipt of a policy or the effective date of coverage, whichever is later. The person soliciting the sale of such insurance shall clearly and conspicuously disclose to the customer, prior to the consummation of the insurance purchase, his right to cancel and shall provide the customer at that time with a form in duplicate by which the right to cancel may be exercised by mailing or delivering the form and policy to the consumer finance licensee or to the insurance company. Such form shall be signed by the borrower, shall be subject to prior commission approval and shall clearly and conspicuously state:

1. That purchase of such insurance is not a condition of any loan or extension of credit.

2. That interest rates and charges do not depend upon the purchase of such insurance.

3. That the customer has the option to pay the insurance premium from his own funds, or to pay the premium with a portion of loan proceeds.

4. That if the customer elects to finance the premium, interest will be charged on the financed premium at the same rate as applies to the loan.

5. If the insurer and creditor are affiliated, that they are affiliated and each expects to profit from the sale of such insurance.

6. The face amount, premium and policy term of such insurance.

7. A comparison of monthly payment, finance charge and total of payments with and without such insurance.

8. That the customer may cancel such insurance by mailing a copy of the notice, together with the policy, to the consumer finance licensee or the insurance company within 30 days after receipt of the policy.

9. That in the event of cancellation, the customer will be promptly refunded the entire premium for such insurance.

10. The name and address of the consumer finance licensee.

11. The name and address of the insurance company.

12. The name, address and telephone number for making complaints to the Bureau of Financial Institutions.

Historical Notes

Derived from VR225-01-0607 § 3, eff. July 1, 1995; amended, Volume 14, Issue 14, eff. March 10, 1998.

Statutory Authority

§ 6.2-1535 of the Code of Virginia.