                                 CODE OF VIRGINIA

POLICY PROVISIONS; DISCLOSURE TO DEBTORS; DELIVERY OF POLICY OR CERTIFICATE (§
38.2-3724)

A. Credit life insurance and credit accident and sickness insurance shall be
evidenced by an individual policy, or in the case of group insurance by a
certificate of insurance. The policy or certificate of insurance shall: (i) be a
document separate and apart from the loan or credit agreement, (ii) refer
exclusively to the insurance coverage, and (iii) be delivered to the debtor.

B. Each policy or certificate of credit life insurance or credit accident and
sickness insurance shall set forth:

   1. The name and address of the insurer;

   2. The name or names of the debtor or, in the case of a certificate, the
   identity by name or otherwise of the debtor;

   3. The age or date of birth of the debtor(s);

   4. The premium or amount payable by the debtor separately for credit life
   insurance and credit accident and sickness insurance;

   5. A description of the coverage including the amount and term of the
   coverage, and any exceptions, limitations or restrictions;

   6. A statement that the benefits shall be paid to the creditor to reduce or
   extinguish the unpaid indebtedness; and

   7. A statement that if the amount of insurance exceeds the amount necessary to
   discharge the indebtedness, any such excess shall be payable to a beneficiary,
   other than the creditor, named by the debtor or to his estate.

C. A credit life or credit accident and sickness insurance policy or
certificate, which provides truncated or critical period coverage or any other
type of similar coverage that does not provide benefits or coverage for the
entire term or amount of the indebtedness, shall be subject to the following
requirements:

   1. The credit life or credit accident and sickness insurance policy or
   certificate shall include a statement printed on the face of the policy or
   first page of the certificate which clearly describes the limited nature of
   the insurance. The statement shall be printed in capital letters and in bold
   twelve-point or larger type; and

   2. The credit life or credit accident and sickness insurance policy or
   certificate shall not include any benefits or coverage other than truncated or
   critical period coverage or any other type of similar coverage that does not
   provide benefits or coverage for the entire term or amount of the
   indebtedness.

D. No individual or group credit life insurance or credit accident and sickness
insurance policy shall be delivered or issued for delivery in this Commonwealth
unless the policy complies with the following requirements:

   1. Each policy shall contain a provision (i) that the policy, or the policy
   and any application endorsed upon or attached to the policy when issued, shall
   constitute the entire contract between the parties, and (ii) that all
   statements made by the creditor or by the individual debtors shall, in the
   absence of fraud, be deemed representations and not warranties;

   2. Each policy shall contain a provision that the validity of the policy shall
   not be contested, except for nonpayment of premiums, after it has been in
   force for two years from its date of issue; and that no statement made by any
   person insured under the policy relating to his insurability shall be used in
   contesting the validity of the insurance with respect to which such statement
   was made after the insurance has been in force for a period of two years
   during such person&#8217;s lifetime, and prior to the date on which the claim
   thereunder arose;

   3. Each policy shall contain a provision that when a claim for the death or
   disability of the insured arises, settlement shall be made upon receipt of due
   proof of such death or disability;

   4. On the face of each policy and certificate there shall be a title that
   briefly and accurately describes the nature and form of the policy;

   5. Each policy and certificate, including any rider or endorsement, shall be
   identified by a form number in the lower lefthand corner of the first page of
   the form. The type size of the text of the policy form or certificate,
   including any rider and endorsement, shall not be less than ten-point type,
   one-point leaded;

   6. Each individual policy or group certificate shall meet the readability
   standards established by the Commission;

   7. Each individual policy and certificate shall have printed on it a notice
   stating in substance that if, during a period of at least ten days from the
   date the policy or certificate is delivered to the policyowner or
   certificateholder the policy or certificate is surrendered to the insurer or
   its agent with a written request for cancellation, the policy or certificate
   shall be void from the beginning and the insurer shall refund any premium paid
   for the policy or certificate; and

   8. Each individual policy or group certificate paid in advance or by a single
   premium shall include a provision, separately and prominently captioned,
   stating in substance the following:
   				&#8220;REFUND OF PREMIUM IN THE EVENT OF EARLY TERMINATION&#8221;
   				&#8220;In the event this insurance policy or certificate is terminated
   prior to its originally scheduled maturity date, or the insured indebtedness
   is terminated or paid off earlier than scheduled, the insurer shall, within 30
   days of receipt of notification from the debtor of such termination or early
   payoff, refund or credit any amount paid by the debtor for the insurance
   beyond the actual date of termination or payoff. Early termination of debt
   includes termination by renewal or refinancing. The debtor&#8217;s
   notification to the insurer shall include proof of termination or early payoff
   of the insured indebtedness.&#8221;

E. An individual credit life insurance or credit accident and sickness insurance
policy or certificate of insurance shall be delivered or mailed to the insured
debtor at the time the indebtedness is incurred or within ten business days
thereafter except as provided in subsection F of this section. For open-end
credit transactions, agricultural or educational loan commitments, or where no
direct charge is made to the debtor for his insurance, the individual policy or
group certificate of insurance may be delivered to the insured debtor at the
time he first becomes eligible for the insurance and need not be delivered again
each time new indebtedness is added.

F. If the individual policy or certificate of insurance is not delivered or
mailed to the debtor at the time indebtedness is incurred, or within ten
business days thereafter, a notice of proposed insurance, setting forth (i) the
name and address of the insurer, (ii) the name or names of the debtor, (iii) the
age of the debtor, (iv) the premium or amount of payment by the debtor, if any,
separately for credit life insurance and credit accident and sickness insurance,
and (v) the amount, term and a brief description of the coverage provided, shall
be delivered to the debtor. The notice of proposed insurance shall refer
exclusively to insurance coverage and shall be separate and apart from the loan
or credit transaction. Upon acceptance of the insurance by the insurer and
within thirty days of the date upon which the indebtedness is incurred, the
insurer shall deliver or mail the individual policy or group certificate of
insurance to the debtor. The notice of proposed insurance shall state that upon
acceptance by the insurer, the insurance shall become effective as provided in
&#xA7; 38.2-3721.

G. If the policy or certificate is issued by any insurer other than the insurer
listed on the application, enrollment request, or notice of proposed insurance,
the debtor shall receive a policy or certificate of insurance setting forth the
name and address of the substituted insurer and the amount of the premium to be
charged. If the amount of the premium is less than that set forth in the notice
of proposed insurance, an appropriate refund shall be made.

HISTORY: 1960, c. 67, § 38.1-482.6; 1982, c. 223, §§ 38.2-3707, 38.2-3709;
1986, c. 562; 1988, c. 551; 1992, c. 586; 2009, c. 643; 2010, c. 211.