) Except as provided in Subsection (2), if a creditor contracts for or receives a separate charge for insurance, the amount charged to the debtor for the insurance may not exceed the premium to be charged by the insurer, as computed at the time the charge to the debtor is determined, conforming to any rate filings required by law and made by the insurer with the Commissioner of Banking and Insurance.

(2) A creditor who provides consumer credit insurance in relation to a revolving charge account (§ 2108) or revolving loan account (§ 3108) may calculate the charge to the debtor by applying, in each billing cycle, the current premium rate to the debtor’s unpaid balance upon which the credit service charge (§ 2207) or loan finance charge (§ 3201) is calculated.

(3) The excess amount of a charge for insurance provided for in agreements in violation of this Section is an excess charge for the purposes of the provisions of the Chapter on Remedies and Penalties (Chapter 5) as to the effect of violations on rights of parties (§ 5201) and of the provision of the Chapter on Administration (Chapter 6) as to administrative enforcement orders (§ 6108) and as to civil actions by the Administrator (§ 6113).
SOURCE: Item (1) Amended by P.L. 27-88:5.