PURPOSE: This rule is designed to regulate the sale of credit dismemberment insurance. It makes the requirements concerning credit dismemberment insurance in 4 CSR 140- 5.020 of the rules of the Division of Finance applicable to all creditors.

Rebecca McDowell Cook (4/30/98)*

1. (1) When accident and health insurance is sold, requisitioned or accepted by any creditor in connection with any extension of credit, this insurance may be in the form prescribed in section 385.070(2), RSMo or in the form known as dismemberment insurance; under no circumstances may both types of accident and health insurance be sold in connection with the same extension of credit. If credit dismemberment insurance is sold, requisitioned or accepted in connection with an extension of credit, this insurance shall be subject to the following requirements, restrictions and qualifications:

   1. (A) Persons Insured. Credit dismemberment insurance may be written on no more than one (1) person on any contract;
   2. (B) Written Evidence of Coverage. The debtor must be provided with a copy of the dismemberment policy or certificate of insurance within thirty (30) days of the extension of credit;
   3. (C) Availability. The debtor must be able to purchase credit dismemberment insurance as a separate and distinct coverage if the debtor so desires. Credit dismemberment insurance which only may be purchased in conjunction with the purchase of some other form of insurance is not permitted;
   4. (D) Cancellation. Credit dismemberment insurance shall be subject to the refunding provisions as though it were credit life insurance issued pursuant to Chapter 385, RSMo and corresponding rules;
   5. (E) Insurance Not to Exceed Contract Terms. Credit dismemberment insurance may not exceed in amount the total indebtedness nor exceed the underlying contract in duration;
   6. (F) Minimum Standards. Credit dismemberment insurance must provide for a total payoff of an underlying indebtedness in the event of loss of the sight of one (1) eye, loss of one (1) hand at or above the wrist and/or loss of one (1) foot at or above the ankle; no restrictions shall be permitted, that is, full benefits must be payable on any dismemberment or blindness which occurs during the coverage; and
   7. (G) Recordkeeping. Claims dismemberment insurance for which no identifiable charge is made to the debtor is exempt from this regulation.
2. (2) Credit dismemberment insurance for which no identifiable charge is made to the debtor is exempt from this regulation.

AUTHORITY: section 374.045, RSMo Supp. 1993 and Chapter 385, RSMo 1986.* This rule was previously filed as 4 CSR 190- 20 CSR 600-2 22.070. Original rule filed Sept. 13, 1982, effective March 11, 1983. *Original authority: see Missouri Revised Statutes, 1986 and Cumulative Supplement to the Revised Statutes of Missouri, 1993.