New Hampshire HB 586: relative to lender-placed insurance on motor vehicles.

Bill Text

HB 586-FN - AS INTRODUCED

2019 SESSION

 19-0604

 01/10

HOUSE BILL 586-FN

AN ACT relative to lender-placed insurance on motor vehicles.

SPONSORS: Rep. Torosian, Rock. 14; Rep. Janigian, Rock. 8; Rep. Morrison, Rock. 9; Rep. DeSimone, Rock. 14; Rep. Aldrich, Belk. 2

COMMITTEE: Commerce and Consumer Affairs

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ANALYSIS

 This bill establishes the creditor-placed insurance act.

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Explanation: Matter added to current law appears in bold italics.

 Matter removed from current law appears [in brackets and struckthrough.]

 Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

 19-0604

 01/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Nineteen

AN ACT relative to lender-placed insurance on motor vehicles.

Be it Enacted by the Senate and House of Representatives in General Court convened:

 1 New Chapter; Creditor-Placed Insurance ACT. Amend RSA by inserting after chapter 407-D the following new chapter:

CHAPTER 407-E

CREDITOR-PLACED INSURANCE ACT

 407-E:1 Definitions. In this chapter: 

 I. "Actual cash value (ACV)" means the cost of replacing damaged or destroyed property with comparable new property, minus depreciation and obsolescence.

 II. "Blanket insurance" means insurance that provides coverage on collateral as defined in a policy issued to a creditor, without specifically listing the collateral covered.

 III. "Collateral" means personal property that is pledged as security for the satisfaction of a debt.

 IV. "Commissioner" means the insurance commissioner.

 V. "Credit agreement" means the written document that sets forth the terms of the credit transaction and includes the security agreement.

 VI. "Credit transaction" means a transaction by the terms of which the repayment of money loaned or credit commitment made, or payment of goods, services or properties sold or leased, is to be made at a future date or dates.

 VII. "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 a lender, vendor or lessor.

 VIII. "Creditor-placed insurance" means insurance that is purchased unilaterally by the creditor, who is the named insured, subsequent to the date of the credit transaction, providing coverage against loss, expense or damage to collateralized personal property as a result of fire, theft, collision or other risks of loss that would either impair a creditor's interest or adversely affect the value of collateral covered by limited dual interest insurance. It is purchased according to the terms of the credit agreement as a result of the debtor's failure to provide required physical damage insurance, with the cost of the coverage being charged to the debtor. It shall be either single interest insurance or limited dual interest insurance.

 IX. "Debtor" means the borrower of money or a purchaser or lessee of goods, services, property, rights or privileges, for which payment is arranged through a credit transaction.

 X. "Insurance tracking" means monitoring evidence of insurance on collateralized credit transactions to determine whether insurance required by the credit agreement has lapsed, and communicating with debtors concerning the status of insurance coverage.

 XI. "Insurer" means an insurance company, association or exchange authorized to issue insurance policies in the state of New Hampshire.

 XII. "Lapse" means that the insurance coverage required by the credit agreement is not in force.

 XIII. "Limited dual interest insurance" means insurance purchased by the creditor to insure its interest in the collateral securing the debtor's credit transaction. This insurance waives the 3 conditions for loss payment under single interest insurance and extends coverage on the collateral while in the possession of the debtor.

 XIV. "Loss ratio" means the ratio of incurred losses to earned premium.

 XV. "Net debt" means the amount necessary to liquidate the remaining debt in a single lump-sum payment, excluding all unearned interest and other unearned charges.

 XVI. "Producer" means a person who receives a commission for insurance placed or written or who, on behalf of an insurer or creditor, solicits, negotiates, effects, procures, delivers, renews, continues or binds policies of insurance to which this chapter applies, except a regular salaried officer, employee or other representative of an insurer who devotes substantially all working time to activities other than those specified here and who receives no compensation that is directly dependent on the amount of insurance business written, and except a regular salaried officer or employee of a creditor who receives