1. (1) In the event of termination, an insurer may, at its option:

   1. (a) Refund unearned premium on a daily pro rata basis, or
   2. (b) Make no charge for credit insurance for the first 15 days of a loan month and charge for a full month for 16 days or more of a loan month.

2. (2) Voluntary prepayment of indebtedness.

   1. (a) If a debtor prepays the indebtedness other than as a result of death or through a lump sum disability payment, and if a disability claim under such coverage is in progress at the time of prepayment, the amount of refund shall be determined as if the prepayment did not occur until the payment of benefits terminates.
   2. (b) No refund shall be paid during any period of disability for which credit disability benefits are payable. A refund shall be computed as if prepayment occurred at the end of the disability period.

3. (3) Involuntary prepayment of indebtedness. If an indebtedness is prepaid by the proceeds of a credit life insurance policy covering the debtor or by a lump sum payment of a disability claim under a credit insurance policy covering the debtor, then it shall be the responsibility of the insurer to ensure that the following are paid to the insured debtor, if living, or the beneficiary other than the creditor, named by the debtor, or to the debtor’s estate:

   1. (a) In the case of prepayment by the proceeds of a credit life insurance policy, or by the proceeds of a lump sum total and permanent disability benefit or accelerated benefit under credit life coverage, an appropriate refund of the credit disability insurance premium in accordance with Rule 69O-163.003, F.A.C.
   2. (b) In the case of prepayment by a lump sum disability claim, an appropriate refund of any credit life insurance premium in accordance with Rule 69O-163.003, F.A.C.
   3. (c) In the case of paragraph (a) or (b), above, the amount of the benefits in excess of the amount required to repay the indebtedness after reducing the indebtedness by any unearned interest or finance charges.

   4. (d) 1. The refund of unearned premium shall be calculated from the date of the event prepaying the indebtedness.

      2. An accelerated death prepayment is considered to be a prepayment due to the credit life insurance benefit.

      3. Refunds due for the premiums of the life benefit shall include the cost of the accelerated death benefit.

4. (4) Termination of group or franchise credit insurance policy.

   1. (a) If a debtor is covered by a group or franchise credit insurance policy providing for the payment of single premiums to the insurer, provision shall be made by the insurer that if the policy is terminated for any reason, insurance coverage with respect to any debtor insured under the policy shall be continued for the entire period for which the single premium has been paid.

   2. (b) 1. If a debtor is covered by a group or franchise credit insurance policy providing for the payment of premiums to the insurer on a monthly outstanding balance basis, the policy shall provide that, if the policy is terminated for any reason, termination notice shall be given to the insured debtor at least 30 days prior to the effective date of termination, except where replacement of the coverage by the same or another insurer in the same or greater amount takes place without lapse of coverage.

      2. The notice required to be given in this paragraph shall be the responsibility of the insurer, but may at the option of the insurer be provided through the creditor.

5. (5) Refinancing the Debt.

   1. (a) If the debt is discharged due to refinancing prior to the scheduled maturity date, the insurance in force shall be terminated at the earlier of:

      1. The issuance of any new insurance in connection with the refinanced debt; and

      2. The date the debt is discharged.

   2. (b) 1. In all cases of termination prior to scheduled maturity, a refund of all unearned premium or unearned insurance charges paid by the debtor shall be paid or credited to the debtor.

      2. In any refinancing of the debt, the effective date of the coverage provided by any policy or certificate shall be deemed to be the first date on which the debtor became insured under the policy with respect to the debt which was refinanced, at least to the extent of the amount and term of the debt outstanding at the time of refinancing the debt.

6. (6) Remittance of premiums. If the creditor adds identifiable insurance charges or premiums for credit insurance to the indebtedness, and any direct or indirect finance, carrying, credit, or service charge is made to the debtor on such insurance charges or premiums, the creditor must remit and the insurer shall collect such premium within sixty (60) days after it is added to the indebtedness.
7. (7) Maximum Aggregate Provisions. A provision in an individual policy or group certificate that sets a maximum limit on total claim payments shall apply only to that individual policy or group certificate.

Rulemaking Authority 624.308(1), 627.678 FS. Law Implemented 624.307(1), 627.678, 627.6785, 627.682 FS. History–New 5-9-82, Formerly 4-7.08, 4-7.008, Amended 2-11-03, Formerly 4-163.008.