Section 0780-01-25-.01 - FINANCING ARRANGEMENT(1) If the insured is a minor and executes a promissory note for the payment of part or all of the first year's premium, such note must be witnessed or acknowledged by at least one of the insured's parents or his guardian.(2) The giving of a promissory note in connection with the first premium must be set out over the applicant's signature in a document executed at the same time as the application. Such document must show the amount of the note and a copy of the document must be attached to the policy at issue.(3) Any down payment must be paid by the applicant in cash and any payment made, directly or indirectly, by the agent to or for the benefit of the applicant in connection with the sale shall be presumed to be a rebate or special inducement.(4) If a note is taken to finance less than the first year's premium, the balance must be paid in cash by the applicant at the time the application is taken.(5) If a promissory note is taken to finance all or part of the first year's premium, said note may be sold or otherwise transferred by the payee with recourse only.(6) A copy of the note and any assignment must be attached to the policy.Tenn. Comp. R. & Regs. 0780-01-25-.01
Original rule certified June 10, 1974.Authority: T.C.A. § 56-6-127.