SENATE, No. 1610

STATE OF NEW JERSEY

INTRODUCED OCTOBER 24, 1996

By Senators CARDINALE and KYRILLOS

An Act to permit combinations of certain credit insurance coverages and supplementing chapter 29 of Title 17B of the New Jersey Statutes.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    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.

    2. This act shall take effect immediately.

STATEMENT

    This bill allows credit life insurance, credit health insurance, credit involuntary unemployment insurance and credit personal property insurance to be offered in any combination to a debtor with at least a five percent discount. The purchase of such combination must be voluntary on the part of the debtor. In addition, when involuntary unemployment insurance coverage is purchased as part of the combination and the insured informs the insurer that he is ineligible for benefits under the coverage or a claim is denied because he is ineligible for the benefits under that coverage, the insurer must promptly refund the portion of the premium of that coverage for the period of ineligibility. The bill specifically provides that an insurer is not required to offer any of the coverages that make up the credit insurance combination for separate purchase.