{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/38.2-3735.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/38.2-3735.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/38.2-3735.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/38.2-3735.html"}],"law_id":57264,"edition_id":1,"section_id":57264,"structure_id":15016,"section_number":"38.2-3735","catch_line":"Disclosure and readability","history":"1992, c. 586; 1999, c. 586; 2009, c. 643; 2010, c. 211.","full_text":"A\n\nIf a creditor makes available to the debtors more than one plan of credit life insurance or more than one plan of credit accident and sickness insurance, all debtors must be informed of all such plans for which they are eligible. In the case of credit life insurance:1\n\nIf a creditor offers a plan of insurance that insures the actual amount of unpaid indebtedness, the creditor shall also offer to the debtor a plan of insurance that insures only the actual amount of indebtedness less any unearned interest or finance charges; and2\n\nIn the event that a plan of insurance that insures the actual amount of unpaid indebtedness is offered, the creditor shall provide to each debtor a disclosure form which shall clearly disclose the difference in premiums charged for a contract wherein the gross indebtedness is insured versus a contract wherein only the net indebtedness is insured. This disclosure shall include the differences between the amount financed, the monthly payment and the total charge for each type of insurance. The form shall be signed and dated by the debtor and the agent, if any, soliciting the application or the creditor’s representative, if any, soliciting the enrollment request. A copy of this disclosure shall be given to the debtor, and a copy shall be made a part of the creditor’s loan file.\n\t\t\t\tNothing contained in this subsection shall be construed to prohibit the creditor from combining such disclosure, in order to avoid redundancy, with other forms of disclosure required under state or federal law.B\n\nWhen elective credit insurance is offered, the borrower must be given written disclosure that purchase of credit insurance is not required and is not a factor in granting credit. The disclosure shall also include notice that the borrower has the right to use alternative coverage or to buy insurance elsewhere.C\n\nIf the debtor is given a contract which includes a single premium payment to be charged for elective credit insurance, the debtor must be given:1\n\nA contract which does not include the elective credit insurance premium; or2\n\nA disclosure form which shall clearly disclose the difference in premiums charged for a contract with credit insurance and one without credit insurance. This disclosure shall include the difference between the amount financed, the monthly payment and the charge for each kind of insurance. The form shall be signed and dated by the debtor and the agent, if any, soliciting the application or the creditor’s representative, if any, soliciting the enrollment request. A copy of this disclosure shall be given to the debtor and a copy shall be made a part of the creditor’s loan file.\n\t\t\t\tNothing contained in this subsection shall be construed to prohibit the creditor from combining such disclosure, in order to avoid redundancy, with other forms of disclosure required under state or federal law.D\n\nIf credit life insurance or credit accident and sickness insurance is required as security for any indebtedness, the debtor shall have the option of (i) furnishing the required amount of insurance through existing policies of insurance owned or controlled by him or (ii) procuring and furnishing the required coverage through any insurer authorized to transact insurance in this Commonwealth. The creditor shall inform the debtor of this option in writing and shall obtain the debtor’s signature acknowledging that he understands this option. Nothing contained in this subsection shall be construed to prohibit the creditor from combining such disclosure, in order to avoid redundancy, with other forms of disclosure required under state or federal law.E\n\nNo contract of insurance upon a debtor paid in advance or by a single premium shall be made or effectuated unless, at the time of the contract, the debtor is provided with a notice prominently disclosing his rights to a refund of premium in the event the insurance is terminated prior to its scheduled maturity date or the insured indebtedness is terminated or paid off early, and of the obligation of the debtor to provide notification to the insurer under subdivision D 8 of § 38.2-3724. This notice shall be signed and dated by the debtor and the agent, if any, soliciting the application or the creditor’s representative, if any, soliciting the enrollment request. A copy of the signed notice shall be given to the debtor and a copy shall be made part of the insurer’s file.\n\t\t\tF. Readability. — The Commission shall not approve any form unless the policy or certificate is written in nontechnical, readily understandable language, using words of common everyday usage.\n\t\t\tA form shall be deemed acceptable under this section if the insurer certifies that the form achieves a Flesch Readability Score of forty or more, using the Flesch Readability Formula as set forth in Rudolf Flesch, The Art of Readable Writing (1949, as revised 1974), and certifies compliance with the guidelines set forth in this section.","order_by":null,"text":{"0":{"id":209772,"text":"If a creditor makes available to the debtors more than one plan of credit life insurance or more than one plan of credit accident and sickness insurance, all debtors must be informed of all such plans for which they are eligible. In the case of credit life insurance:","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"A1"},"1":{"id":209773,"text":"If a creditor offers a plan of insurance that insures the actual amount of unpaid indebtedness, the creditor shall also offer to the debtor a plan of insurance that insures only the actual amount of indebtedness less any unearned interest or finance charges; and","type":"section","prefixes":["A","1"],"prefix":"1","entire_prefix":"A1","prefix_anchor":"A1","level":2,"prior_prefix":"A","next_prefix":"A2"},"2":{"id":209774,"text":"In the event that a plan of insurance that insures the actual amount of unpaid indebtedness is offered, the creditor shall provide to each debtor a disclosure form which shall clearly disclose the difference in premiums charged for a contract wherein the gross indebtedness is insured versus a contract wherein only the net indebtedness is insured. This disclosure shall include the differences between the amount financed, the monthly payment and the total charge for each type of insurance. The form shall be signed and dated by the debtor and the agent, if any, soliciting the application or the creditor’s representative, if any, soliciting the enrollment request. A copy of this disclosure shall be given to the debtor, and a copy shall be made a part of the creditor’s loan file.\n\t\t\t\tNothing contained in this subsection shall be construed to prohibit the creditor from combining such disclosure, in order to avoid redundancy, with other forms of disclosure required under state or federal law.","type":"section","prefixes":["A","2"],"prefix":"2","entire_prefix":"A2","prefix_anchor":"A2","level":2,"prior_prefix":"A1","next_prefix":"B"},"3":{"id":209775,"text":"When elective credit insurance is offered, the borrower must be given written disclosure that purchase of credit insurance is not required and is not a factor in granting credit. The disclosure shall also include notice that the borrower has the right to use alternative coverage or to buy insurance elsewhere.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A2","next_prefix":"C"},"4":{"id":209776,"text":"If the debtor is given a contract which includes a single premium payment to be charged for elective credit insurance, the debtor must be given:","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"C1"},"5":{"id":209777,"text":"A contract which does not include the elective credit insurance premium; or","type":"section","prefixes":["C","1"],"prefix":"1","entire_prefix":"C1","prefix_anchor":"C1","level":2,"prior_prefix":"C","next_prefix":"C2"},"6":{"id":209778,"text":"A disclosure form which shall clearly disclose the difference in premiums charged for a contract with credit insurance and one without credit insurance. This disclosure shall include the difference between the amount financed, the monthly payment and the charge for each kind of insurance. The form shall be signed and dated by the debtor and the agent, if any, soliciting the application or the creditor’s representative, if any, soliciting the enrollment request. A copy of this disclosure shall be given to the debtor and a copy shall be made a part of the creditor’s loan file.\n\t\t\t\tNothing contained in this subsection shall be construed to prohibit the creditor from combining such disclosure, in order to avoid redundancy, with other forms of disclosure required under state or federal law.","type":"section","prefixes":["C","2"],"prefix":"2","entire_prefix":"C2","prefix_anchor":"C2","level":2,"prior_prefix":"C1","next_prefix":"D"},"7":{"id":209779,"text":"If credit life insurance or credit accident and sickness insurance is required as security for any indebtedness, the debtor shall have the option of (i) furnishing the required amount of insurance through existing policies of insurance owned or controlled by him or (ii) procuring and furnishing the required coverage through any insurer authorized to transact insurance in this Commonwealth. The creditor shall inform the debtor of this option in writing and shall obtain the debtor’s signature acknowledging that he understands this option. Nothing contained in this subsection shall be construed to prohibit the creditor from combining such disclosure, in order to avoid redundancy, with other forms of disclosure required under state or federal law.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C2","next_prefix":"E"},"8":{"id":209780,"text":"No contract of insurance upon a debtor paid in advance or by a single premium shall be made or effectuated unless, at the time of the contract, the debtor is provided with a notice prominently disclosing his rights to a refund of premium in the event the insurance is terminated prior to its scheduled maturity date or the insured indebtedness is terminated or paid off early, and of the obligation of the debtor to provide notification to the insurer under subdivision D 8 of § 38.2-3724. This notice shall be signed and dated by the debtor and the agent, if any, soliciting the application or the creditor’s representative, if any, soliciting the enrollment request. A copy of the signed notice shall be given to the debtor and a copy shall be made part of the insurer’s file.\n\t\t\tF. Readability. — The Commission shall not approve any form unless the policy or certificate is written in nontechnical, readily understandable language, using words of common everyday usage.\n\t\t\tA form shall be deemed acceptable under this section if the insurer certifies that the form achieves a Flesch Readability Score of forty or more, using the Flesch Readability Formula as set forth in Rudolf Flesch, The Art of Readable Writing (1949, as revised 1974), and certifies compliance with the guidelines set forth in this section.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D"}},"ancestry":[{"id":15016,"edition_id":1,"name":"Credit Life Insurance and Credit Accident and Sickness Insurance","identifier":"37.1","label":"chapter","depth":2,"order_by":1,"parent_id":12698,"metadata":{},"date_created":"2026-06-26 03:51:32","date_modified":"2026-06-26 03:51:32","permalink":{"id":216059,"object_type":"structure","relational_id":15016,"identifier":"37.1","token":"38.2\/37.1","url":"\/38.2\/37.1\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12698,"edition_id":1,"name":"Insurance","identifier":"38.2","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:49","date_modified":"2026-06-26 03:43:49","permalink":{"id":210661,"object_type":"structure","relational_id":12698,"identifier":"38.2","token":"38.2","url":"\/38.2\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":78738,"structure_id":15016,"section_number":"38.2-3717","catch_line":"Scope","url":"\/38.2-3717\/","token":"38.2\/37.1\/38.2-3717","metadata":false},{"id":61942,"structure_id":15016,"section_number":"38.2-3718","catch_line":"Definitions","url":"\/38.2-3718\/","token":"38.2\/37.1\/38.2-3718","metadata":false},{"id":68352,"structure_id":15016,"section_number":"38.2-3719","catch_line":"Forms of credit life insurance and credit accident and sickness insurance","url":"\/38.2-3719\/","token":"38.2\/37.1\/38.2-3719","metadata":false},{"id":71214,"structure_id":15016,"section_number":"38.2-3720","catch_line":"Amount of credit life insurance and credit accident and sickness insurance","url":"\/38.2-3720\/","token":"38.2\/37.1\/38.2-3720","metadata":false},{"id":83437,"structure_id":15016,"section_number":"38.2-3721","catch_line":"Term of credit life insurance and credit accident and sickness insurance","url":"\/38.2-3721\/","token":"38.2\/37.1\/38.2-3721","metadata":false},{"id":74250,"structure_id":15016,"section_number":"38.2-3722","catch_line":"Variable interest rate indebtedness; amount; disclosure; refunds","url":"\/38.2-3722\/","token":"38.2\/37.1\/38.2-3722","metadata":false},{"id":60031,"structure_id":15016,"section_number":"38.2-3723","catch_line":"Reserves","url":"\/38.2-3723\/","token":"38.2\/37.1\/38.2-3723","metadata":false},{"id":72023,"structure_id":15016,"section_number":"38.2-3724","catch_line":"Policy provisions; disclosure to debtors; delivery of policy or certificate","url":"\/38.2-3724\/","token":"38.2\/37.1\/38.2-3724","metadata":false},{"id":79475,"structure_id":15016,"section_number":"38.2-3725","catch_line":"Policy forms to be filed with Commission; approval or disapproval by Commission","url":"\/38.2-3725\/","token":"38.2\/37.1\/38.2-3725","metadata":false},{"id":81616,"structure_id":15016,"section_number":"38.2-3726","catch_line":"Credit life insurance rates","url":"\/38.2-3726\/","token":"38.2\/37.1\/38.2-3726","metadata":false},{"id":64017,"structure_id":15016,"section_number":"38.2-3727","catch_line":"Credit accident and sickness insurance rates","url":"\/38.2-3727\/","token":"38.2\/37.1\/38.2-3727","metadata":false},{"id":67560,"structure_id":15016,"section_number":"38.2-3728","catch_line":"Use of rates","url":"\/38.2-3728\/","token":"38.2\/37.1\/38.2-3728","metadata":false},{"id":77928,"structure_id":15016,"section_number":"38.2-3729","catch_line":"Refunds","url":"\/38.2-3729\/","token":"38.2\/37.1\/38.2-3729","metadata":false},{"id":76093,"structure_id":15016,"section_number":"38.2-3730","catch_line":"Experience reports and adjustment of prima facie rates","url":"\/38.2-3730\/","token":"38.2\/37.1\/38.2-3730","metadata":false},{"id":63767,"structure_id":15016,"section_number":"38.2-3731","catch_line":"Claims","url":"\/38.2-3731\/","token":"38.2\/37.1\/38.2-3731","metadata":false},{"id":78709,"structure_id":15016,"section_number":"38.2-3732","catch_line":"Insurer delegation of duties","url":"\/38.2-3732\/","token":"38.2\/37.1\/38.2-3732","metadata":false},{"id":76840,"structure_id":15016,"section_number":"38.2-3733","catch_line":"Portion of premium may be allowed to creditor; insurance may be provided and serviced at creditor's place of business","url":"\/38.2-3733\/","token":"38.2\/37.1\/38.2-3733","metadata":false},{"id":63261,"structure_id":15016,"section_number":"38.2-3734","catch_line":"License requirements","url":"\/38.2-3734\/","token":"38.2\/37.1\/38.2-3734","metadata":false},{"id":57264,"structure_id":15016,"section_number":"38.2-3735","catch_line":"Disclosure and readability","url":"\/38.2-3735\/","token":"38.2\/37.1\/38.2-3735","metadata":false},{"id":71653,"structure_id":15016,"section_number":"38.2-3736","catch_line":"Noncontributory coverage","url":"\/38.2-3736\/","token":"38.2\/37.1\/38.2-3736","metadata":false},{"id":69488,"structure_id":15016,"section_number":"38.2-3737","catch_line":"Application","url":"\/38.2-3737\/","token":"38.2\/37.1\/38.2-3737","metadata":false},{"id":70889,"structure_id":15016,"section_number":"38.2-3738","catch_line":"What laws applicable","url":"\/38.2-3738\/","token":"38.2\/37.1\/38.2-3738","metadata":false}],"previous_section":{"id":63261,"structure_id":15016,"section_number":"38.2-3734","catch_line":"License requirements","url":"\/38.2-3734\/","token":"38.2\/37.1\/38.2-3734","metadata":false},"next_section":{"id":71653,"structure_id":15016,"section_number":"38.2-3736","catch_line":"Noncontributory coverage","url":"\/38.2-3736\/","token":"38.2\/37.1\/38.2-3736","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/38.2-3735\/","history_text":"

This law was first created in 1992. The record of its establishment is cataloged in chapter 586 of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. Unfortunately, the 1992 \u201cActs\u201d aren\u2019t available online. It has been modified 3 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 1999, chapter 586<\/a>; in 2009, chapter 643<\/a>; in 2010, chapter 211<\/a>.<\/p>","references":[{"id":84169,"section_number":"38.2-233","catch_line":"Credit involuntary unemployment insurance; credit property insurance; disclosure and readability","order_by":null,"url":"\/38.2-233\/"},{"id":69488,"section_number":"38.2-3737","catch_line":"Application","order_by":null,"url":"\/38.2-3737\/"}],"refers_to":[{"id":72023,"section_number":"38.2-3724","catch_line":"Policy provisions; disclosure to debtors; delivery of policy or certificate","order_by":null,"url":"\/38.2-3724\/"}],"permalink":{"id":216133,"object_type":"law","relational_id":57264,"identifier":"38.2-3735","token":"38.2\/37.1\/38.2-3735","url":"\/38.2-3735\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/38.2-3735\/","token":"38.2\/37.1\/38.2-3735","dublin_core":{"Title":"Disclosure and readability","Type":"Text","Format":"text\/html","Identifier":"\u00a7 38.2-3735","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> If a creditor<\/span> makes available to the debtors<\/span> more than one plan of credit life insurance<\/span> or more than one plan of credit accident and sickness insurance<\/span>, all debtors<\/span> must be informed of all such plans for which they are eligible. In the case of credit life insurance<\/span>: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> If a creditor<\/span> offers a plan of insurance<\/span> that insures the actual amount of unpaid indebtedness<\/span>, the creditor<\/span> shall also offer to the debtor<\/span> a plan of insurance<\/span> that insures only the actual amount of indebtedness<\/span> less any unearned interest or finance charges; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> In the event that a plan of insurance<\/span> that insures the actual amount of unpaid indebtedness<\/span> is offered, the creditor<\/span> shall provide to each debtor<\/span> a disclosure form<\/span> which shall clearly disclose the difference in premiums charged for a contract<\/span> wherein the gross indebtedness<\/span> is insured versus a contract<\/span> wherein only the net indebtedness<\/span> is insured. This disclosure shall include the differences between the amount financed, the monthly payment and the total charge for each type of insurance<\/span>. The form<\/span> shall be signed and dated by the debtor<\/span> and the agent, if any, soliciting the application or the creditor<\/span>’s representative, if any, soliciting the enrollment request. A copy of this disclosure shall be given to the debtor<\/span>, and a copy shall be made a part of the creditor<\/span>’s loan file.\n\t\t\t\tNothing contained in this subsection shall be construed to prohibit the creditor<\/span> from combining such disclosure, in order<\/span> to avoid redundancy, with other forms<\/span> of disclosure required under state<\/span> or federal law<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> When elective credit insurance<\/span> is offered, the borrower must be given written disclosure that purchase of credit insurance<\/span> is not required and is not a factor in granting credit. The disclosure shall also include notice that the borrower has the right to use alternative coverage or to buy insurance<\/span> elsewhere. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> If the debtor<\/span> is given a contract<\/span> which includes a single premium payment to be charged for elective credit insurance<\/span>, the debtor<\/span> must be given: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> A contract<\/span> which does not include the elective credit insurance<\/span> premium; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> A disclosure form<\/span> which shall clearly disclose the difference in premiums charged for a contract<\/span> with credit insurance<\/span> and one without credit insurance<\/span>. This disclosure shall include the difference between the amount financed, the monthly payment and the charge for each kind of insurance<\/span>. The form<\/span> shall be signed and dated by the debtor<\/span> and the agent, if any, soliciting the application or the creditor<\/span>’s representative, if any, soliciting the enrollment request. A copy of this disclosure shall be given to the debtor<\/span> and a copy shall be made a part of the creditor<\/span>’s loan file.\n\t\t\t\tNothing contained in this subsection shall be construed to prohibit the creditor<\/span> from combining such disclosure, in order<\/span> to avoid redundancy, with other forms<\/span> of disclosure required under state<\/span> or federal law<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> If credit life insurance<\/span> or credit accident and sickness insurance<\/span> is required as security for any indebtedness<\/span>, the debtor<\/span> shall have the option of (i) furnishing the required amount of insurance<\/span> through existing policies of insurance<\/span> owned or controlled by him or (ii) procuring and furnishing the required coverage through any insurer<\/span> authorized to transact insurance<\/span> in this Commonwealth. The creditor<\/span> shall inform the debtor<\/span> of this option in writing and shall obtain the debtor<\/span>’s signature acknowledging that he understands this option. Nothing contained in this subsection shall be construed to prohibit the creditor<\/span> from combining such disclosure, in order<\/span> to avoid redundancy, with other forms<\/span> of disclosure required under state<\/span> or federal law<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> No contract<\/span> of insurance<\/span> upon a debtor<\/span> paid in advance or by a single premium shall be made or effectuated unless, at the time of the contract<\/span>, the debtor<\/span> is provided with a notice prominently disclosing his rights to a refund of premium in the event the insurance<\/span> is terminated prior to its scheduled maturity date or the insured indebtedness<\/span> is terminated or paid off early, and of the obligation of the debtor<\/span> to provide notification to the insurer<\/span> under subdivision D 8 of § 38.2-3724<\/a>. This notice shall be signed and dated by the debtor<\/span> and the agent, if any, soliciting the application or the creditor<\/span>’s representative, if any, soliciting the enrollment request. A copy of the signed notice shall be given to the debtor<\/span> and a copy shall be made part of the insurer<\/span>’s file.\n\t\t\tF. Readability. — The Commission<\/span> shall not approve any form<\/span> unless the policy or certificate is written in nontechnical, readily understandable language, using words of common everyday usage.\n\t\t\tA form<\/span> shall be deemed acceptable under this section if the insurer<\/span> certifies that the form<\/span> achieves a Flesch Readability Score of forty or more, using the Flesch Readability Formula as set forth in Rudolf Flesch, The Art of Readable Writing (1949, as revised 1974), and certifies compliance with the guidelines set forth in this section. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nDISCLOSURE AND READABILITY (\u00a7 38.2-3735)\n\nA. If a creditor makes available to the debtors more than one plan of credit\nlife insurance or more than one plan of credit accident and sickness insurance,\nall debtors must be informed of all such plans for which they are eligible. In\nthe case of credit life insurance:\n\n 1. If a creditor offers a plan of insurance that insures the actual amount of\n unpaid indebtedness, the creditor shall also offer to the debtor a plan of\n insurance that insures only the actual amount of indebtedness less any\n unearned interest or finance charges; and\n\n 2. In the event that a plan of insurance that insures the actual amount of\n unpaid indebtedness is offered, the creditor shall provide to each debtor a\n disclosure form which shall clearly disclose the difference in premiums\n charged for a contract wherein the gross indebtedness is insured versus a\n contract wherein only the net indebtedness is insured. This disclosure shall\n include the differences between the amount financed, the monthly payment and\n the total charge for each type of insurance. The form shall be signed and\n dated by the debtor and the agent, if any, soliciting the application or the\n creditor’s representative, if any, soliciting the enrollment request. A\n copy of this disclosure shall be given to the debtor, and a copy shall be made\n a part of the creditor’s loan file.\n \t\t\t\tNothing contained in this subsection shall be construed to prohibit the\n creditor from combining such disclosure, in order to avoid redundancy, with\n other forms of disclosure required under state or federal law.\n\nB. When elective credit insurance is offered, the borrower must be given written\ndisclosure that purchase of credit insurance is not required and is not a factor\nin granting credit. The disclosure shall also include notice that the borrower\nhas the right to use alternative coverage or to buy insurance elsewhere.\n\nC. If the debtor is given a contract which includes a single premium payment to\nbe charged for elective credit insurance, the debtor must be given:\n\n 1. A contract which does not include the elective credit insurance premium; or\n\n 2. A disclosure form which shall clearly disclose the difference in premiums\n charged for a contract with credit insurance and one without credit insurance.\n This disclosure shall include the difference between the amount financed, the\n monthly payment and the charge for each kind of insurance. The form shall be\n signed and dated by the debtor and the agent, if any, soliciting the\n application or the creditor’s representative, if any, soliciting the\n enrollment request. A copy of this disclosure shall be given to the debtor and\n a copy shall be made a part of the creditor’s loan file.\n \t\t\t\tNothing contained in this subsection shall be construed to prohibit the\n creditor from combining such disclosure, in order to avoid redundancy, with\n other forms of disclosure required under state or federal law.\n\nD. If credit life insurance or credit accident and sickness insurance is\nrequired as security for any indebtedness, the debtor shall have the option of\n(i) furnishing the required amount of insurance through existing policies of\ninsurance owned or controlled by him or (ii) procuring and furnishing the\nrequired coverage through any insurer authorized to transact insurance in this\nCommonwealth. The creditor shall inform the debtor of this option in writing and\nshall obtain the debtor’s signature acknowledging that he understands this\noption. Nothing contained in this subsection shall be construed to prohibit the\ncreditor from combining such disclosure, in order to avoid redundancy, with\nother forms of disclosure required under state or federal law.\n\nE. No contract of insurance upon a debtor paid in advance or by a single premium\nshall be made or effectuated unless, at the time of the contract, the debtor is\nprovided with a notice prominently disclosing his rights to a refund of premium\nin the event the insurance is terminated prior to its scheduled maturity date or\nthe insured indebtedness is terminated or paid off early, and of the obligation\nof the debtor to provide notification to the insurer under subdivision D 8 of\n§ 38.2-3724. This notice shall be signed and dated by the debtor and the\nagent, if any, soliciting the application or the creditor’s\nrepresentative, if any, soliciting the enrollment request. A copy of the signed\nnotice shall be given to the debtor and a copy shall be made part of the\ninsurer’s file.\n\t\t\tF. Readability. — The Commission shall not approve any form unless\nthe policy or certificate is written in nontechnical, readily understandable\nlanguage, using words of common everyday usage.\n\t\t\tA form shall be deemed acceptable under this section if the insurer certifies\nthat the form achieves a Flesch Readability Score of forty or more, using the\nFlesch Readability Formula as set forth in Rudolf Flesch, The Art of Readable\nWriting (1949, as revised 1974), and certifies compliance with the guidelines\nset forth in this section.\n\nHISTORY: 1992, c. 586; 1999, c. 586; 2009, c. 643; 2010, c. 211.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}