1. (a) A finance company shall not offer or sell credit insurance in any manner which restricts a borrower's ability to voluntarily select or reject credit life or credit disability insurance or both.

2. (b) A finance loan company shall use a written form (which may be separate from or incorporated in the loan documents), which shall be signed or initialed by each of the insured borrowers. Such form should be in substantially the following form:

   “Sign or initial.__________ Loan No.__________

   __________I want credit life insurance.

   __________I do not want credit life insurance.

   __________I want credit disability insurance.

   __________ I do not want credit disability insurance.”

3. (c) When credit insurance is sold more than 30 days after the making of the loan, in lieu of subsection (b) above, a finance company may obtain an audio recorded confirmation of an insured borrower's selection of credit insurance. Such recording shall be obtained with the consent of the insured borrower(s) and include confirmation of the type of credit insurance selected. A finance company shall make recorded confirmations available to the Commissioner upon request.

Note: Authority cited: Section 22150, Financial Code. Reference: Sections 22150 and 22314, Financial Code.

History

1. Amendment filed 12-3-74; effective thirtieth day thereafter (Register 74, No. 49).

2. Amendment filed 12-29-83; effective thirtieth day thereafter (Register 83, No. 53).

3. Change without regulatory effect amending subsection (b) and Note filed 6-14-95 pursuant to section 100, title 1, California Code of Regulations (Register 95, No. 24).

4. New subsection (c) filed 8-4-98; operative 9-3-98 (Register 98, No. 32).