We do not offer credit insurance.

Our loan system hard codes a voluntary credit insurance disclosure with 3 options for the borrwer: I am not eligible, credit insurance is not available (that is us), and I want credit insurance.

Closer is to circle "insurance not available" option & borrwer to sign. More often than not our loan staff is failing to circle & obtain this borrower signature.

Since we do not offer insurance and have this disclosure only because of our loan system, what if any risk do we have when it is not acknowledged by the borrower?

(b) Credit disclosure. In the case of an application for credit in connection with which an insurance product or annuity is solicited, offered, or sold, a covered person must disclose that the bank may not condition an extension of credit...

If you do not solicit, offer, or sell an insurance product, I would argue that the disclosure need not be given (unless bank policy/procedure requires that it must)

It certainly wouldn't be required by the consumer protection in insurance rules RLM cited. There could possibly be a state law issue.

The only other thing that comes to mind is there have been cases of consumers suing because they weren't offered the opportunity to purchase this type of insurance, and subsequently became disabled. This could be trying to address that issue, but if you don't offer the insurance, I can't think of any reason you'd have tell them that. There are probably a lot of other products or services you could offer, but don't and you don't list them for the customer.