Contract: A legal written agreement that becomes binding when signed.
Credit life insurance: means insurance on the life of a debtor in connection with an extension of credit that pays a person if the debtor dies. See Utah Code 31A-1-301
Disability: means a physiological or psychological condition that partially or totally limits an individual's ability to:
(a)
perform the duties of:
(i)
that individual's occupation; or
(ii)
an occupation for which the individual is reasonably suited by education, training, or experience; or
(b)
perform two or more of the following basic activities of daily living:
a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;
(ii)
a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and
(iii)
a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301
Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
(a)
“Debt cancellation agreement” means a contract between a lender and a borrower where the lender, for a separately stated consideration, agrees to waive all or part of the debt in the event of a fortuitous event such as death, disability, or the destruction of the lender’s collateral.
(b)
“Debt suspension agreement” means a contract between a lender and a borrower where the lender, for a separately stated consideration, agrees to suspend scheduled installment payments for an agreed period of time in the event of a:
(i)
fortuitous event such as involuntary unemployment or accident; or
(ii)
fortuitous condition such as sickness.
(c)
“Guaranteed asset protection waiver” is as defined in Section 31A-6b-102.
Except as provided in Subsection (6), the commissioner has sole jurisdiction over the regulation of a debt cancellation agreement or debt suspension agreement.
Except as provided in Subsection (6), a debt cancellation agreement or a debt suspension agreement may be issued only by an insurer authorized to issue a debt cancellation agreement or debt suspension agreement under this section.
(5)
(a)
The rules promulgated by the commissioner under this section shall regulate the issuance of a debt cancellation agreement or debt suspension agreement according to the functional insurance equivalent of each type of debt cancellation agreement or debt suspension agreement.
(b)
Except as provided in Subsection (5)(c), in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the commissioner may by rule determine the functional insurance equivalent of each type of debt cancellation agreement or debt suspension agreement.
(c)
Notwithstanding Subsection (5)(b), the functional insurance equivalent of a debt cancellation agreement that provides for the cancellation of indebtedness at death is credit life insurance.
(6)
Notwithstanding the other provisions of this section, the issuance of a debt cancellation agreement or a debt suspension agreement by an institution or a subsidiary of an institution is:
(a)
not subject to this section; and
(b)
subject to the jurisdiction of the primary regulator of:
(i)
the institution; or
(ii)
the subsidiary of an institution.
(7)
This section does not apply to a guaranteed asset protection waiver.
