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KANSAS COMMENT, 2010

1. The usual forms of consumer credit insurance provide benefits conditioned on the death or disability of the consumer, the contracts being described as credit life insurance and credit accident and health insurance. The insured event might also be loss of earnings in other ways, as by the loss of employment. A type of insurance not embraced in the term "consumer credit insurance" is that procured by a creditor to guard against the uncollectibility of an account. Insurance of this type, although historically and properly called "credit insurance," is conditioned on the nonpayment of debt, and does not serve any interest of consumers of the insured person. This is true also of insurance indemnifying the creditor against loss due to nonfiling of instruments. By contrast, the benefit of consumer credit insurance runs to consumers as well as creditors; any payment made to the creditor by the insurer under the policy satisfies the consumer's obligation to the extent of the payment.

2. The definition of "consumer credit insurance" excludes insurance related to long-term credit, following a similar but broader exclusion from the scope of the NAIC model act.