                                 CODE OF VIRGINIA

TERM OF CREDIT LIFE INSURANCE AND CREDIT ACCIDENT AND SICKNESS INSURANCE (§
38.2-3721)

A. The term of any policy or certificate of credit life insurance or credit
accident and sickness insurance shall, subject to acceptance by the insurer,
commence on the date when the debtor becomes obligated to the creditor; except
that where a group policy provides coverage with respect to existing
obligations, the insurance on a debtor with respect to such indebtedness shall
commence on the effective date of the policy. Where evidence of insurability is
required and such evidence is furnished more than thirty days after the date
when the debtor becomes obligated to the creditor, the term of the insurance may
commence on the date the insurance company determines the evidence to be
satisfactory, and in such event there shall be an appropriate refund or
adjustment of any charge to the debtor for insurance. The term of such insurance
shall not extend more than fifteen days beyond the scheduled maturity date of
the indebtedness except when extended without additional cost to the debtor. In
all cases of termination prior to scheduled maturity, a refund shall be paid or
credited as provided in &#xA7; 38.2-3729.

B. Renewal or refinancing of the indebtedness. &#8212; If the indebtedness is
discharged due to renewal or refinancing prior to the scheduled maturity date,
the insurance in force shall be terminated before any new insurance may be
issued in connection with the renewed or refinanced indebtedness. In all cases
of such termination prior to scheduled maturity, a refund shall be paid or
credited to the debtor as provided in &#xA7; 38.2-3729. In any renewal or
refinancing of the indebtedness, the effective date of the coverage for purposes
of application of any policy provision shall be deemed to be the first date on
which the debtor became insured under the policy covering the indebtedness which
was renewed or refinanced at least to the extent of the remaining amount and
duration of coverage in force on the indebtedness that was renewed or
refinanced.

C. Termination of group credit insurance policy. &#8212; 1. If a debtor is
covered by a group credit insurance policy providing for the payment of single
premiums to the insurer, then provision shall be made by the insurer that in the
event of termination of the policy for any reason, insurance coverage with
respect to any debtor insured under such policy shall be continued for the
entire period for which the single premium has been paid.

   2. If a debtor is covered by a group credit insurance policy providing for the
   payment of premiums to the insurer on a monthly outstanding balance basis,
   then the policy shall provide that, in the event of termination of such policy
   for whatever reason, notice of termination thereof shall be given to the
   insured debtor at least thirty 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. The notice
   required in this subdivision shall be given by the insurer or, at the option
   of the insurer, by the creditor, in writing, mailed to the insured debtor at
   the insured debtor&#8217;s address as shown in the records of the insurer or
   creditor.

D. Each credit life insurance or credit accident and sickness insurance policy
or certificate shall contain a provision that the insurance may be terminated
upon written request of the debtor except if the insurance was required as
security for any indebtedness at the time of the credit transaction. If
insurance is required, the debtor shall have the right to terminate the
insurance by furnishing evidence of other insurance that is at least equal in
coverage and protection to the creditor.

HISTORY: 1960, c. 67, § 38.1-482.5; 1982, c. 223, § 38.2-3706; 1986, c. 562;
1992, c. 586.