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Insurance Disclosures on Consumer Loan

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Question: 
What disclosures must be given if a bank is offering credit life and accident and health insurance on a consumer loan?
Answer: 

Consumer Protection for Bank Sales of Insurance

  1. The "Credit disclosures": must be given orally and in writing at the time of application if an insurance product is solicited, offered or sold in connection with credit request. Refer to Section 343.40(b).
  2. The "Insurance disclosure": must be given orally and in writing prior to the initial sale of an insurance product or annuity. Refer to Section 343.40(a).

Truth in Lending:

If the insurance is truly voluntary and you want to exclude the premiums from the finance charges, you must provide the disclosure outlined in Section 226.4(d)(1) [voluntary, disclosure the premium and term and the consumer signs or initials].

First published on BankersOnline.com 7/10/06

First published on 07/10/2006

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