PURPOSE: This rule carries out and effectuates the provisions of sections 375.930–375.948, RSMo (1994), as such sections apply to mortgage guaranty insurance.

1. (1) An insurer issuing or proposing to issue mortgage guaranty insurance commits the unfair act or practice of “misrepresentation and false advertising of insurance policies” as defined in section 375.936(6)(a), RSMo (1994), unless the insurer: 1) shall adopt, print and make available a schedule of premium charges for mortgage guaranty insurance policies. The schedule shall show the entire amount of premium charge for each type of mortgage guaranty insurance policy issued by the company; and 2) at the time of policy or certificate issuance to the debtor responsible for paying the premium charges, the insurer makes or causes to be made the disclosure required in section (2) of this rule.
2. (2) Insurers shall make the following disclosure to the borrower in writing in at least fourteen (14)-point type font, as required by this rule:

Notice to Borrower: Your lender has decided to purchase private mortgage insurance (PMI) from us (the insurer). PMI provides insurance coverage to the lender if you default on the loan for the purchase or lease of your home or other real estate. Often, a lender who purchases private mortgage insurance from us will require you to repay the lender for the cost of the insurance premiums. However, the lender will often eliminate this repayment requirement if your loan reaches a certain loan-to-value (LTV) ratio. The LTV is the ratio of your loan to the lesser of the appraisal or the purchase price of your home or other real estate. For further details regarding both the extent to which you are required to repay PMI premiums and when you may terminate PMI premium repayments, please contact your lender.

AUTHORITY: section 375.948, RSMo (1994).* Original rule filed April 11, 1996, effective Nov. 30, 1996. *Original authority 1959, amended 1978, 1991.