N.J. Stat. tit. 17B, ch. 29

in effect

N.J. Stat. § 17B:29-1 Scope; differences in long-term and short-term indebtedness; rules and regulations

All life insurance and all health insurance in connection with loans or other credit transactions shall be subject to the provisions of this chapter, except where the issuance of such insurance is an isolated transaction on the part of the insurer not related to an agreement or a plan for insuring debtors of the creditor. The commissioner may, after notice and hearing, promulgate rules and regulations which will take account of the differences inherent in long-term and short-term indebtedness, including, but not limited to, differences in underwriting standards, the term of the loan, the nature of the risk, and the maximum amount of insurance purchased. L.1971, c. 144, s. 17B:29-1. Amended by L.1982, c. 184, s. 1, eff. Nov. 24, 1982.

N.J. Stat. § 17B:29-2 Definitions

a. "Credit life insurance" means insurance on the life of a debtor pursuant to or in connection with a specific loan or other credit transaction; b. "Credit health insurance" means insurance on a debtor to provide indemnity for payments becoming due on a specific loan or other credit transaction while the debtor is disabled as defined in the policy; c. "Creditor" means the lender of money or vendor or lessor of goods, services, property, rights or privileges, for which payment is arranged through a credit transaction, or any successor to the right, title or interest of any such lender, vendor, or lessor, and an affiliate, associate or subsidiary of any of them or any director, officer or employee of any of them or any other person in any way associated with any of them; d. "Debtor" means a borrower of money or a purchaser or lessee of goods, services, property, rights of privileges for which payment is arranged through a credit transaction, and includes each partner who is jointly and severally liable for a partnership indebtedness. An officer of a corporation is not a debtor in connection with a corporate indebtedness, unless he is personally liable for such indebtedness as a codebtor. When more than one person is jointly obligated in connection with an indebtedness, credit insurance may be written either on an individual basis or, at the option of the insureds, on a joint basis, provided that the credit insurance has been approved by the Department of Insurance to be written on a joint basis in this State; e. "Indebtedness" means the total amount payable by a debtor to a creditor in connection with a loan or other credit transaction. L.1971, c. 144, s. 17B:29-2. Amended by L.1977, c. 296, s. 1, eff. Dec. 15, 1977; L.1982, c. 184, s. 2, eff. Nov. 24, 1982.

N.J. Stat. § 17B:29-3 Forms of credit life insurance and credit health insurance

Credit life insurance and credit health insurance shall be issued only in the following forms: a. Individual policies of life insurance issued to debtors on the term plan; b. Individual policies of health insurance issued to debtors on a term plan or disability benefit provisions in individual policies of credit life insurance; c. Group policies of life insurance issued to creditors providing insurance upon the lives of debtors on the term plan; d. Group policies of health insurance issued to creditors on a term plan insuring debtors or disability benefit provisions in group credit life insurance policies to provide such coverage. L.1971, c. 144, s. 17B:29-3.

N.J. Stat. § 17B:29-3.1 Insurance offered with credit involuntary unemployment insurance

1. a. The individual and group coverages permitted by N.J.S.17B:29-3 may be offered in combination with credit involuntary unemployment insurance, credit personal property insurance, or both, under separate and distinct policies, provided that the total combined premium amount or rate to be charged to the debtor shall be reduced by five percent or by a greater percentage at the discretion of the insurer. b. When credit involuntary unemployment insurance is included in the combined coverages and (1) the debtor notifies the insurer in writing that he is or has become ineligible for credit involuntary unemployment insurance coverage by reason of being or becoming voluntarily unemployed, or by reason of being or becoming self-employed, and states the date on which that ineligibility commenced; or (2) a claim is denied under the credit involuntary unemployment insurance coverage because the debtor became ineligible for that coverage, the insurer shall promptly remit a refund of the portion of the premium applicable to the credit involuntary unemployment insurance coverage during the period of ineligibility. c. (1) Notwithstanding the provisions of N.J.S.17B:27-3 to the contrary, group life insurance coverage may be issued in combination with other coverages in accordance with this section. (2) Insurers issuing insurance coverages combined in accordance with this section shall not be required to offer any of the coverages for separate purchase. (3) The purchase of insurance coverages combined in accordance with this section shall be voluntary on the part of the debtor. d. For the purpose of this section, "credit personal property insurance" means insurance covering direct or indirect damage or loss, by fire or other perils, including those of extended coverage, to the personal property of the debtor all or part of which is the security for the loan, which insurance shall be for an amount and term not to exceed the amount and term of the loan. L.1996,c.146.

N.J. Stat. § 17B:29-4 Amount of credit life insurance and credit health insurance

a. Credit Life Insurance (1) The initial amount of credit life insurance shall not exceed the total amount repayable under the contract of indebtedness and, where an indebtedness is repayable in substantially equal installments, the amount of insurance shall at no time exceed the scheduled or actual amount of unpaid indebtedness, whichever is greater. (2) Notwithstanding the provisions of the above paragraph, insurance on agricultural credit transaction commitments, not exceeding 18 months in duration, may be written up to the amount of the loan commitment, on a nondecreasing or level term plan. (3) Notwithstanding the provisions of paragraph a. (1) of this or any other subsection, insurance on educational credit transaction commitments may be written for the amount of the portion of such commitment that has not been advanced by the creditor. b. Credit Health Insurance The total amount of periodic indemnity payable by credit health insurance in the event of disability, as defined in the policy, shall not exceed the aggregate of the periodic scheduled unpaid installments of the indebtedness; and the amount of each periodic indemnity payment shall not exceed the original indebtedness divided by the number of periodic installments. L.1971, c. 144, s. 17B:29-4.

N.J. Stat. § 17B:29-5 Term of credit life insurance and credit health insurance

The term of any credit life insurance or credit health 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 30 days after the date when the debtor becomes obligated to the creditor and such evidence is determined by the insurer to be satisfactory, the term of the insurance may commence on the date on which the evidence is furnished to the insurer 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 15 days beyond the scheduled maturity date of the indebtedness except when extended without additional cost to the debtor. 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 termination prior to scheduled maturity, a refund shall be paid or credited as provided in section 17B:29-8. L.1971, c. 144, s. 17B:29-5.

N.J. Stat. § 17B:29-6 Provisions of policies and certificates of insurance: disclosure to debtors

a. All credit life insurance and credit health insurance sold shall be evidenced by an individual policy, or in the case of group insurance by a certificate of insurance, which individual policy or group certificate of insurance shall be delivered to the debtor. b. Each individual policy or group certificate of credit life insurance and each individual policy or group certificate of credit health insurance shall, in addition to other requirements of law, set forth the name and home office address of the insurer, the identity by name or otherwise of the person or persons insured, the rate of premium separately in connection with credit life insurance and credit health insurance if a payment therefor is collected from the debtor, a description of the coverage including any exceptions, limitations and restrictions, and shall state that the benefits shall be paid to the creditor to reduce or extinguish the unpaid indebtedness and, wherever the amount of insurance may exceed the unpaid indebtedness, that any such excess shall be payable to a beneficiary, other than the creditor, named by the debtor or to his estate. For the purpose of this section, a payment for such insurance is deemed to have been collected from the debtor if an amount therefor is separately stated or is included in a total charge for insurance and other services. c. Said individual policy or group certificate of insurance shall be delivered to the insured debtor at the time the indebtedness is incurred except as hereinafter provided. d. If said individual policy or group certificate of insurance is not delivered to the debtor at the time the indebtedness is incurred, a copy of the application for such policy or a notice of proposed insurance, signed by the debtor and setting forth the name and home office address of the insurer, the name or names of the debtor, the amount of payment, separately in connection with credit life insurance and credit health insurance coverage, and a brief description of the coverage provided shall be delivered to the debtor at the time such indebtedness is incurred. The copy of the application for, or notice of proposed insurance shall also refer exclusively to insurance coverage, and shall be separate and apart from the loan, sale or other credit statement of account, instrument or agreement, except that, when the information required by this subsection is adequately set forth therein, this requirement may be waived by the commissioner. Upon acceptance of the insurance and within 30 days of the date upon which the indebtedness is incurred, the insurer shall cause the individual policy or group certificate of insurance to be delivered to the debtor. Said application or notice of proposed insurance shall state that upon acceptance by the insurer, the insurance shall become effective as of the date the indebtedness is incurred. e. Any policy, group certificate, copy of the application or notice of proposed insurance, as referred to in this section, may specify an age beyond which the insurance on a debtor will not become effective or on which a debtor's insurance will terminate; provided, however, that no charge shall be made to a debtor for coverage beyond the limiting age. L.1971, c. 144, s. 17B:29-6.

N.J. Stat. § 17B:29-7 Filing of forms; premium rate schedules

17B:29-7. a. All forms of policies, certificates of insurance, notice of proposed insurance, applications for insurance, endorsements and riders delivered or issued for delivery in this State and the schedules of premium rates pertaining thereto shall be filed with the commissioner in accordance with the provisions of subsection g. of this section. b. (Deleted by amendment, P.L.1995, c.73.) c. If a form or the schedule of premium rates pertaining thereto is disapproved by the commissioner during the 60-day period, the form may not be delivered or issued for delivery unless the form or schedule of premium rates is resubmitted in accordance with paragraphs (2), (3) and (4) of subsection g. of this section. A form or schedule of rates that is disapproved shall be subject to review in accordance with the procedure described in the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) and any rules adopted thereunder. Any such form which is filed by the commissioner or deemed filed may be so delivered or issued for delivery until such time as any subsequent withdrawal of the filing by the commissioner, following an opportunity for a hearing held in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) and any rules adopted thereunder, becomes final in accordance therewith. d. (Deleted by amendment, P.L.1995, c.73.) e. The disapproval for filing or the withdrawal of the filing of any such form or schedule of premium rates may only be on one or both of the following grounds that may be applicable: (1) the premium rates charged or to be charged are excessive in relation to benefits, or (2) such form contains provisions which are unjust, unfair, inequitable, misleading, deceptive, or encourage misrepresentation of the coverage, or are contrary to any provision of this code or of any rule or regulation promulgated thereunder. f. If a group policy of credit life insurance or credit health insurance (1) has been delivered in this State before the effective date of this chapter, or (2) has been or is delivered in another State before or after the effective date of this chapter, the insurer shall be required to submit for filing only the group certificate and notice of proposed insurance delivered or issued for delivery in this State as specified in subsections b. and d. of N.J.S.17B:29-6 and such forms shall be filed by the commissioner if they conform with the requirements specified in said subsections and if the schedules of premium rates applicable to the insurance evidenced by such certificate or notice are not in excess of the insurer's schedules of premium rates filed with the commissioner. g. (1) Any form or schedule of premium rates subject to the provisions of N.J.S.17B:29-1 et seq. shall be filed with the commissioner for approval as provided in this subsection. Any form, except those certified pursuant to section 17 of P.L.1995, c.73 (C.17B:25-18.3), and any schedule of premium rates pertaining thereto, shall be filed with the commissioner for approval pursuant to the provisions of this subsection. (2) Any form or schedule of premium rates pertaining thereto filed with the commissioner for approval pursuant to this subsection shall be deemed approved upon the expiration of 60 days after the submission of the form or schedule of premium rates unless disapproved in writing by the commissioner within that time. Any such disapproval shall be based only on the specific provisions of applicable statutes, regulations adopted by the commissioner, or guidelines published by the commissioner as of the effective date of P.L.1995, c.73 (C.17:48-8.1 et al.) with regard to forms of that type or the schedules of premium rates pertaining thereto. A disapproved form or schedule of premium rates pertaining thereto may be resubmitted. (3) Any form or schedule of premium rates submitted for approval pursuant to this subsection and disapproved by the commissioner before the expiration of 60 days after its submission, shall be deemed withdrawn at the expiration of 60 days after the transmittal of the commissioner's specific objections unless the filer submits a complete written response to all of the commissioner's objections regarding the submission within the 60 day period. (4) A form or schedule of premium rates, resubmitted in response to the commissioner's objections pursuant to paragraph (2) of this subsection, shall be deemed approved upon the expiration of 30 days after its resubmission unless disapproved in writing by the commissioner within that time. No disapproval by the commissioner of a resubmission shall be based on any objection not specified by the commissioner in his initial disapproval of the filing, except that the commissioner may disapprove the form or schedule of premium rates based on any new provisions introduced in the resubmission or if in addressing the specified objections cited in the commissioner's disapproval transmission, the insurer changes or modifies any substantive provisions of the form or schedule of premium rates. Any form or schedule of premium rates resubmitted for approval pursuant to this subsection and disapproved by the commissioner before the expiration of 30 days after its submission, shall be deemed withdrawn at the expiration of 30 days after the transmittal of the commissioner's specific objections unless the filer submits a complete written response to all of the commissioner's objections regarding the submission within the 30 day period. (5) With respect to all types of forms or schedules of premium rates to be filed pursuant to this subsection and currently on file with and approved by the commissioner upon enactment of P.L.1995, c.73 (C.17:48-8.1 et al.), the commissioner shall propose regulations which may be amended or modified by the commissioner from time to time after adoption, concerning any actuarial or form requirements consistent with applicable statutory provisions but not specified therein, not later than 180 days after enactment of P.L.1995, c.73 (C.17:48-8.1 et al.). Any such regulation shall be adopted not later than 180 days after it is proposed. With respect to any type of form or schedule of premium rates not then on file with the commissioner but filed subsequent to the enactment of P.L.1995, c.73 (C.17:48-8.1 et al.) the commissioner shall propose regulations, which may be amended or modified by the commissioner from time to time after adoption, concerning any actuarial or form requirements consistent with applicable statutory provisions but not specified therein, within 120 days after the form is approved or deemed approved by the commissioner pursuant to this subsection. Any such regulation shall be adopted not later than 180 days after it is proposed. The commissioner may issue bulletins which are interpretive of existing regulations consistent with statutory provisions, with respect to any type of policy form that may be certified pursuant to section 17 of P.L.1995, c.73 (C.17B:25-18.3). Nothing in this subsection shall preclude an insurer from filing a certifiable form or schedule of premium rates for approval by the commissioner. (6) For purposes of this subsection, "days" means calendar days, except that when the last day of any specified time period is a Saturday, Sunday, or State holiday, then the time period shall end on the next following business day. With respect to any specified time period pertaining to correspondence between an insurer and the commissioner, the time period shall commence on the date that such correspondence is postmarked or submitted to a private delivery service. h. For purposes of subsection b. of section 17 of P.L.1995, c.73 (C.17B:25-18.3), credit life and credit health insurance shall be considered a category of individual or group life or health insurance. L.1971, c.144; amended 1995,c.73,s.23.

N.J. Stat. § 17B:29-8 Premiums and refunds

a. Any insurer may revise its schedules of premium rates from time to time, and shall file such revised schedules with the commissioner. No insurer shall issue any credit life insurance policy or credit health insurance policy for which the premium rate exceeds that determined by the schedules of such insurer as then on file with the commissioner. b. Each individual policy, or group certificate shall provide that in the event of termination of the insurance prior to the scheduled maturity date of the indebtedness, any refund of an amount paid by the debtor for insurance shall be paid or credited promptly to the person entitled thereto; provided, however, that the commissioner shall prescribe a minimum refund and no refund which would be less than such minimum need be made. The formula to be used in computing such refund shall be filed with and approved by the commissioner. c. If a creditor requires a debtor to make any payment for credit life insurance or credit health insurance and an individual policy or group certificate of insurance is not issued, the creditor shall immediately give written notice to such debtor and shall promptly make an appropriate credit to the account. d. The amount charged to a debtor for any credit life or credit health insurance shall not exceed the premiums charged by the insurer, as computed at the time the charge to the debtor is determined. e. Nothing in this chapter shall be construed to legalize any charge now illegal under any statute or rule of law governing credit transactions. L.1971, c. 144, s. 17B:29-8.

N.J. Stat. § 17B:29-9 Issuance of policies

All policies of credit life insurance and credit health insurance shall be delivered or issued for delivery in this State only by an insurer authorized to do an insurance business therein, and shall be issued only through holders of licenses or authorizations issued by the commissioner. The commissioner may require that a restricted license as referred to in section 17B:22-12d be obtained by a group policyholder. L.1971, c. 144, s. 17B:29-9.

N.J. Stat. § 17B:29-10 Claims

a. All claims shall be promptly reported to the insurer or its designated claim representative, and the insurer shall maintain adequate claim files. All claims shall be settled as soon as possible and in accordance with the terms of the insurance contract. b. All claims shall be paid either by draft drawn upon the insurer or by check of the insurer to the order of the claimant to whom payment of the claim is due pursuant to the policy provisions, or upon direction of such claimant to one specified. c. No plan or arrangement shall be used whereby any person, firm or corporation other than the insurer or its designated claim representative shall be authorized to settle or adjust claims. The creditor shall not be designated as claim representative for the insurer in adjusting claims; provided, that a group policyholder may, by arrangement with the group insurer, draw drafts or checks in payment of claims due to the group policyholder subject to audit and review by the insurer. L.1971, c. 144, s. 17B:29-10.

N.J. Stat. § 17B:29-11 Existing insurance--choice of insurer

When credit life insurance or credit health insurance is required as additional security for any indebtedness, the debtor shall, upon request to the creditor, have the option of furnishing the required amount of insurance through existing policies of insurance owned or controlled by him or of procuring and furnishing the required coverage through any insurer authorized to transact an insurance business within this State. L.1971, c. 144, s. 17B:29-11.

N.J. Stat. § 17B:29-12 Enforcement

Whenever the commissioner finds that there has been a violation of this chapter or any rules or regulations issued pursuant thereto, and after written notice thereof and hearing given to the insurer or other person authorized or licensed by the commissioner, he shall set forth the details of his findings together with an order for compliance by a specified date. Such order shall be binding on the insurer and other person authorized or licensed by the commissioner on the date specified unless sooner withdrawn by the commissioner or a stay thereof has been ordered by a court of competent jurisdiction. L.1971, c. 144, s. 17B:29-12.

N.J. Stat. § 17B:29-13 Judicial review

Any party to the proceeding affected by an order of the commissioner shall be entitled to judicial review by following the procedure set forth in the Administrative Procedure Act (P.L.1968, c. 410) and any rules adopted thereunder. L.1971, c. 144, s. 17B:29-13.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026