Printable Format16a-4-201. (UCCC) Term of insurance. (1) Consumer credit insurance provided by a creditor may be subject to the furnishing of evidence of insurability satisfactory to the insurer. Whether or not such evidence is required, the term of the insurance shall commence no later than when the consumer becomes obligated to the creditor or when the consumer applies for the insurance, whichever is later, except as follows:
(a) If any required evidence of insurability is not furnished until more than 30 days after the term would otherwise commence, the term may commence on the date when the insurer determines the evidence to be satisfactory; or
(b) if the creditor provides insurance not previously provided covering debts previously created, the term may commence on the effective date of the policy.
(2) The originally scheduled term of the insurance shall extend at least until the due date of the last scheduled payment of the debt except as follows:
(a) If the insurance relates to an open-end credit account, the term need extend only until the payment of the debt under the account and may be sooner terminated after at least 30 days' notice to the consumer; or
(b) if the consumer is advised in writing that the insurance will be written for a specified shorter time, the term need extend only until the end of the specified time.
(3) The term of the insurance shall not extend more than 15 days after the originally scheduled due date of the last scheduled payment of the debt unless it is extended without additional cost to the consumer or as an incident to a deferral, refinancing or consolidation.
History: L. 1973, ch. 85, § 73; L. 2024, ch. 6, § 92; January 1, 2025.
KANSAS COMMENT, 2000
1. The term of consumer credit insurance provided by a creditor should normally be the same as the term of the debt.
2. Subsection (1) permits postponement of the effective date of consumer credit insurance coverage until after the debt is incurred:
(a) Under the preamble to subsection (1), when the debtor delays the application for the insurance — coverage does not then become effective at least until the debtor applies for the insurance;
(b) under subsection (1)(a), when the insurer requires the debtor to furnish evidence of insurability satisfactory to the insurer and the debtor does not furnish the evidence "until more than 30 days after the term would otherwise commence" — coverage does not then become effective until the insurer determines the evidence of insurability to be satisfactory;
(c) under subsection (1)(b), when the creditor newly provides insurance with respect to debt previously created — coverage does not then become effective at least until the effective date of the policy.
3. However, under subsection (1), if evidence of insurability satisfactory to the insurer is required, and is furnished within "30 days after the term would otherwise commence," coverage becomes effective when the term of insurance would otherwise commence, e.g., the life of a debtor who, less than 30 days after becoming obligated to a creditor, furnishes evidence of insurability satisfactory to the insurer under a group policy insuring the lives of the creditor's debtors furnishing such evidence and who then dies is insured under the policy.
4. Subsection (2) specifies the circumstances when the term of consumer credit insurance need not extend to the due date of the last scheduled installment of the debt.
5. Subsection (3) limits, subject to the stated exceptions, the term of consumer credit insurance to 15 days after the scheduled due date of the last installment of the debt.