Indiana Code 27-1-38-7. Prohibited activities of a depository institution or an affiliate of a depository institution
(1) As a condition precedent to a loan of money, an extension of credit, or the renewal of a loan of money or an extension of credit, require a customer to:
Terms Used In Indiana Code 27-1-38-7
- affiliate: means a company that controls, is controlled by, or is under common control with another company. See Indiana Code 27-1-38-1
- depository institution: means a depository financial institution (as defined in IC 28-9-2-6). See Indiana Code 27-1-38-3
- Insurance: means a contract of insurance or an agreement by which one (1) party, for a consideration, promises to pay money or its equivalent or to do an act valuable to the insured upon the destruction, loss or injury of something in which the other party has a pecuniary interest, or in consideration of a price paid, adequate to the risk, becomes security to the other against loss by certain specified risks; to grant indemnity or security against loss for a consideration. See Indiana Code 27-1-2-3
- insurer: means a company, firm, partnership, association, order, society or system making any kind or kinds of insurance and shall include associations operating as Lloyds, reciprocal or inter-insurers, or individual underwriters. See Indiana Code 27-1-2-3
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- person: includes individuals, corporations, associations, and partnerships; personal pronoun includes all genders; the singular includes the plural and the plural includes the singular. See Indiana Code 27-1-2-3
- Precedent: A court decision in an earlier case with facts and law similar to a dispute currently before a court. Precedent will ordinarily govern the decision of a later similar case, unless a party can show that it was wrongly decided or that it differed in some significant way.
- premium: means money or any other thing of value paid or given in consideration to an insurer, insurance producer, or solicitor on account of or in connection with a contract of insurance and shall include as a part but not in limitation of the above, policy fees, admission fees, membership fees and regular or special assessments and payments made on account of annuities. See Indiana Code 27-1-2-3
- Property: includes personal and real property. See Indiana Code 1-1-4-5
(B) renew;
insurance through a particular insurer, insurance producer, broker, or group of insurers or insurance producers.
(2) When insurance is required in connection with a loan of money or an extension of credit, reject an insurance policy solely because the insurance policy was issued by an insurer that is not associated with the depository institution or an affiliate of the depository institution.
(3) As a condition precedent to an extension of credit or an offer of a product or service that is equivalent to an extension of credit, require a customer to obtain insurance from a particular depository institution, affiliate of a depository institution, insurance producer, or insurer. This subdivision does not prohibit a depository institution or an affiliate of a depository institution from informing a customer or prospective customer that:
(A) insurance is required for a loan of money or an extension of credit;
(B) approval for a loan of money or an extension of credit is contingent upon the purchase of insurance; or
(C) insurance is available through the depository institution or affiliate.
(4) Unreasonably reject an insurance policy that is furnished by a customer for the protection of property that secures a loan of money or an extension of credit to the customer. For purposes of this subdivision, a rejection is not unreasonable if the rejection is based on uniformly applied reasonable standards that:
(A) relate to the extent of insurance required;
(B) relate to the financial soundness and services of the insurer issuing the insurance policy;
(C) do not discriminate against a particular kind of insurer; and
(D) do not require rejection of an insurance policy because the insurance policy provides coverage in addition to the coverage required for the loan of money or extension of credit.
(5) Require a person to pay a separate charge:
(A) in connection with the issuance of insurance that is required as surety for a loan of money for real estate; or
(B) to substitute insurance issued by one (1) insurer for an insurance policy issued by another insurer.
For purposes of this subdivision, a separate charge does not include interest charged on loans of money or advancements for premiums under the terms of a loan agreement or credit agreement. This subdivision does not apply to charges that apply when the insurance producer that provides the insurance is the depository institution or the affiliate of a depository institution.
(6) Require of an:
(A) insurance producer; or
(B) insurer;
a condition that is not customarily required of an insurance producer or insurer that is connected with the depository institution or the affiliate of a depository institution.
(7) Use advertising or insurance promotional material that would cause a reasonable person to incorrectly believe that the federal or state government:
(A) is responsible for the insurance sales activity; or
(B) guarantees the credit;
of the depository institution or the affiliate of a depository institution.
(8) Use advertising or insurance promotional material that would cause a reasonable person to incorrectly believe that the federal or state government:
(A) guarantees a return on an insurance product sold by; or
(B) is a source of payment on an insurance obligation of;
the depository institution or the affiliate of a depository institution.
(9) Act as an insurance producer, unless the depository institution or the affiliate of a depository institution is licensed under IC 27-1-15.6.
(10) Solicit or sell insurance, other than credit insurance or flood insurance, unless the solicitation or sale is completed through documents separate from a loan of money or an extension of credit.
(11) Include the expense of an insurance premium, other than a credit insurance premium or a flood insurance premium, in a primary loan of money or extension of credit without the express written consent of the customer.
(12) Solicit or sell insurance, unless the area in which insurance sales activities of the depository institution or affiliate occur is, to the extent practicable, physically separate from the area where retail deposits are routinely accepted by the depository institution or affiliate.
(13) Solicit or sell insurance, unless the depository institution or the affiliate of a depository institution maintains separate books and records that relate to insurance transactions, including files related to consumer complaints.
As added by P.L.130-2002, SEC.2.