We just received a fax from one of our insurance vendor stating that, for credit insurance paid over the life of the loan, only that part which is payable at or before closing is to be included in the points & fees calculation. Other HOEPA info that I have pulled from BOL simply refers to "credit life/disability premiums." Is our vendor wrong, or am I misunderstanding the other material?

The summary to the Reg Z changes regarding HOEPA state "The fee-based trigger is revised to include the cost of optional credit insurance and similar debt protection products paid at closing". Products having a monthly payment option and not a single premium which is financed, would not be included since these amounts are not paid at closing.

What about loans where the Life/A&H is rebated using the rules of 78?

Rebate form would not matter - if the premium is considered collected before or at closing it is included in the points and fees trigger test. Using the rule of 78's, I think the entire premium would be considered collected at closing.

As a side note, remember that if the premiums are collected monthly, you would still include the amount of any premium collected before or at closing in your calculation. Mostly, that will be just one month's premium.