W. Va. Code R. § 114-61-2

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 114-61-2 - Definitions

2.1. "Closed-end credit" means a credit transaction that does not meet the definition of open-end credit.

2.2. "Collateral" means personal property in which a purchase money security interest is retained, or that is pledged as security for the satisfaction of a debt.

2.3. "Commissioner" means the West Virginia Insurance Commissioner.

2.4. "Compensation" means commissions, dividends, retrospective rate credits, service fees, expense allowances or reimbursements, gifts, furnishing of equipment, facilities, goods and services or any other form of remuneration that is paid either directly or indirectly as a result of the sale of credit property insurance.

2.5. "Credit agreement" means the written document that sets forth the terms of the credit transaction and includes the security agreement.

2.6. "Credit personal property insurance" means a policy, endorsement, rider, binder, certificate or other instrument or evidence of insurance written in connection with a credit transaction that:

2.6.a. Covers perils to the goods purchased through a credit transaction or used as collateral for a credit transaction and that concerns a creditor's interest in the purchased goods or pledged collateral either in whole or in part; or

2.6.b. Covers perils to goods purchased in connection with an open-end credit transaction.

2.7. "Credit transaction" means a transaction by which the repayment of money loaned or credit commitment made, or payment of goods, services or properties sold or leased, is to be made at a future date or dates.

2.8. "Creditor" means the lender of money or vendor or lessor of goods, services, property, rights or privileges for which payment is arranged through a credit transaction, or any successor to the right, title or interest of a lender, vendor or lessor and an affiliate, associate or subsidiary of any of them or any director, officer or employee of any of them or any person in any way associated with any of them.

2.9. "Creditor-placed insurance" means insurance that is purchased unilaterally by the creditor, who is the named insured, subsequent to the date of the credit transaction, which provides coverage against loss, expense or damage to the collateralized personal property as a result of fire, theft, collision or other risks of loss that would either impair a creditor's interest or adversely affect the value of collateral covered by dual interest insurance. It is purchased according to the terms of the credit agreement as a result of the debtor's failure to provide required insurance, with the cost of the coverage being charged to the debtor. It shall be either single interest insurance or dual interest insurance.

2.10. "Debtor" means the borrower of money or a purchaser or lessee of goods, services, property, rights or privileges for which payment is arranged through a credit transaction.

2.11. "Dual interest insurance" means credit personal property insurance covering the seller's or creditor's interest and at least partially the borrower's interest in the goods purchased through the credit transaction or pledged as collateral for the credit transaction.

2.12. "Experience" means earned premiums and incurred losses during the experience period.

2.13. "Experience period" means the most recent period of time for which earned premiums and incurred losses are reported, but not for a period longer than three (3) full years.

2.14. "Finance charge" means any charge payable directly or indirectly as an incident to or as a condition of the extension of credit, including but not limited to interest or time price differentials; amount payable under a discount system of additional charges; service, transaction or carrying charges; loan fees; points or similar charges; appraisal fees; or charges incurred for investigating the credit-worthiness of the consumer. The term shall not include charges as a result of default, taxes, license fees, delinquency charges or filing fees.

2.15. "Gross debt" means the sum of the remaining payments owed to the creditor by the debtor.

2.16. "Incurred losses" means total claims and claim adjustment expenses paid during the experience period plus any change in claim and claim adjustment expense reserves.

2.17. "Identifiable charge" means a charge for credit personal property insurance that is made to debtors having such insurance and not made to debtors not having such insurance. It includes a charge for insurance that is disclosed in the credit or other instrument furnished to the debtor which sets out the financial elements of the credit transaction and any difference in the finance, interest, service or other similar charge made to debtors who are in like circumstances except for the insured or noninsured status of the debtor.

2.18. "Insurance Producer" means a person as defined in W. Va. Code § 33-12-2(f), that receives compensation for insurance written or that, on behalf of an insurer or creditor, solicits, negotiates, effects, procures, delivers, renews, continues or binds credit personal property insurance to which this rule applies.

2.19. "Insurer" means insurer as identified in W. Va. Code § 33-1-2.

2.20. "Loss ratio" means incurred losses divided by the sum of earned premiums.

2.21. "Mobile home" means "manufactured home" as that term is defined in W. Va. Code § 37-15-2(g), "mobile home" as that term is defined in W. Va. Code § 37-15-2(h), or "modular home" as that term is defined in W. Va. Code § 37-15-2(i).

2.22. "Net debt" means the amount necessary to liquidate the remaining debt in a single lump-sum payment, excluding all unearned interest and other unearned finance charges.

2.23. "Non-filing insurance" means insurance that indemnifies the creditor for loss of its interest in the collateral due to the failure to perfect a security interest.

2.24. "Open-end credit" means credit extended by a creditor under an agreement in which:

2.24.a. The creditor reasonably contemplates repeated transactions;

2.24.b. The creditor imposes a finance charge from time to time on an outstanding unpaid balance; and

2.24.c. The amount of credit that may be extended to the debtor during the term of the agreement, up to any limit set by the creditor, is generally made available to the extent that any outstanding balance is repaid.

2.25. "Reverse competition" means competition among insurers that regularly takes the form of insurers vying with each other for the favor of persons who control, or may control, the placement of the insurance with insurers. Reverse competition tends to increase insurance premiums or prevent the lowering of premiums in order that greater compensation may be paid to persons for such business as a means of obtaining the placement of business. In these situations, the competitive pressure to obtain business by paying higher compensation to these persons overwhelms any downward pressures consumers may exert on the price of insurance, thus causing prices to rise or remain higher than they would otherwise.

2.26. "Single interest insurance" means credit personal property insurance covering only the seller's or creditor's interest in the goods purchased through the credit transaction or pledged as collateral in the credit transaction.

2.27. "Title insurance" means insurance as defined in W. Va. Code § 33-1-10(f)(4).

W. Va. Code R. § 114-61-2