26-17-104. Debtor groups for benefit of creditor.

(a) The lives of a group of individuals may be insured under a policy issued to a creditor, a creditor's parent holding company or a trustee or agent designated by two (2) or more creditors, which creditor, holding company, affiliate, trustee or agent is deemed the policyholder, to insure debtors of the creditor concerning their indebtedness, subject to the following requirements:

(i) All debtors or any class of debtors of the creditor are eligible for insurance under the terms of the policy;

(ii) The policy may provide that the term "debtors" shall include:

(A) Borrowers of money or purchasers or lessees of goods, services or property for which payment is arranged through a credit transaction;

(B) The debtors of one (1) or more subsidiary corporations; and

(C) The debtors of one (1) or more affiliated corporations, proprietors or partnerships if the business of the policyholder and of the affiliated corporations, proprietors or partnerships is under common control.

(iii) Repealed by Laws 1990, ch. 3, § 3.

(iv) Policy premiums shall be paid by the policyholder, subject to the following requirements:

(A) Repealed by Laws 1990, ch. 3, § 3.

(B) Repealed by Laws 1990, ch. 3, § 3.

(C) If the insured debtor does not pay any part of the premium for his insurance, the policy shall insure all eligible debtors, except those who reject the coverage in writing and those who do not present evidence of individual insurability satisfactory to the insurer.

(v) Repealed by Laws 1990, ch. 3, § 3.

(vi) The policy may exclude from the classes eligible for insurance classes of debtors determined by age;

(vii) The total amount of insurance payable for an indebtedness shall not exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor, except that insurance written concerning open-end credit having a credit limit exceeding ten thousand dollars ($10,000.00) may be in an amount not exceeding the credit limit;

(viii) The insurance may be payable to the creditor or any successor to the right, title and interest of the creditor. The payment shall reduce or extinguish the unpaid indebtedness of the debtor to the extent of the payment and any excess of the insurance is payable to the insured or the estate of the insured;

(ix) Notwithstanding paragraphs (i) through (viii) of this subsection, insurance on agricultural credit transaction commitments may be written up to the amount of the loan commitment on a nondecreasing or level term plan. Insurance on educational credit transaction commitments may be written up to the amount of the loan commitment less the amount of any repayments made on the loan.