20-1621.01. Definitions

In this article, unless the context otherwise requires:

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

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.

3. " Compensation" means commission, service fee, brokerage or any other valuable consideration that is paid to a person as a result of the sale of credit insurance.

4. " Consumer credit insurance" has the same meaning prescribed in section 20-1603.

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

6. " Credit property insurance" means a policy of insurance that covers perils to 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.

7. " Credit transaction" means a transaction in 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.

8. " Creditor" means the lender of money or the 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, any director, officer or employee of any of them or any person in any way associated with any of them.

9. " Creditor-placed insurance" means insurance that:

(a) A creditor unilaterally purchases after the date of a credit transaction.

(b) Names the creditor as the insured.

(c) Provides coverage against loss, expense or damage to collateralized personal property as a result of fire, theft, collision or other risks of loss that would either impair the creditor's interest or adversely affect the value of collateral covered by dual interest insurance.

(d) Is purchased according to the terms of the credit agreement because of the debtor's failure to provide required insurance and the cost of which coverage is charged to the debtor.

(e) Is either single interest insurance or dual interest insurance.

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.

11. " Dual interest insurance" means a credit personal property insurance covering a 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.

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

13. " Experience period" means the most recent period of time for which earned premiums and incurred losses are reported, not to exceed a period of three years.

14. " Finance charge" means any charge payable directly or indirectly to a lender as an incident to or as a condition of the extension of credit, including interest, time price differentials, amounts 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 a consumer, but does not include charges as a result of default, taxes, license fees, delinquency charges or filing fees.

15. " Gross debt" means the sum of the remaining payments owed to a creditor by a debtor, including compensation, finance charges, interest or any other charges.

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

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

18. " 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.

19. " Nonrecording insurance" means insurance that protects a creditor if the creditor suffers a loss as a result of its failure to perfect its security interest in collateral by failure to file a lien or record a security interest in the collateral as required by law for perfection of a security interest.

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

(a) The creditor reasonably contemplates repeated transactions.

(b) The creditor imposes a finance charge from time to time on an outstanding unpaid balance.

(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.

21. " Personal property" means all tangible property not classified as real property.

22. " Policy" means a policy, contract, endorsement, binder, certificate or evidence of credit property insurance, by whatever name called, and includes all attached or incorporated clauses, endorsements and papers.

23. " Producer" means a person or entity that receives a commission for insurance written or that, on behalf of an insurer or creditor, solicits, negotiates, effects, procures, delivers, renews, continues or binds credit insurance to which this article applies.

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