31.13.01.19

.19 Refunds.

A. In event of termination of the insurance before the scheduled maturity date of the indebtedness, other than by performance of the insurance contract, the insurer shall promptly refund or credit to the person entitled to it the appropriate portion of any premiums paid for the insurance.

B. In the case of decreasing term credit life insurance or of credit health insurance on which premiums are charged to the debtor other than as a single premium payable in advance, or in the case of level term credit life insurance, the amount of the refund or credit shall be not less than the pro rata gross unearned premium.

C. In the case of decreasing credit life insurance on which premiums are charged to the debtor in a single sum payable in advance, the amount of the refund or credit shall be not less than the amount computed by the "sum of the digits" method commonly known as the Rule of 78.

D. In the case of credit health insurance on which premiums are charged to the debtor in a single sum payable in advance, the amount of the refund or credit shall be not less than the amount computed by the "sum of the digits" method, commonly known as the Rule of 78.

E. At the option of the insurer, refunds under C and D of this regulation may be calculated on a daily or on a monthly basis, as may be elected in the filing made by the insurer. Refunds may be calculated on an approximate daily basis by interpolating pro rata between the values at the beginning and at the end of the month. For this purpose, the insurer shall assume that every month has 30 days. If refunds are calculated on a monthly basis, a charge may not be made for a period less than 15 days elapsing since the last monthly installment due date, but if the period is 15 days or more, a charge may be made for the full month.

F. A premium refund need not be made under §A of this regulation if the sum of the refunds on all insurance issued to the debtor by an insurer in connection with the loan would be less than $1.

G. If a refund or credit is due the debtor in accordance with Insurance Article, §13-107(b), Annotated Code of Maryland, or in accordance with Insurance Article, §13-112(b), Annotated Code of Maryland, the amount of refund or credit shall be not less than the amount paid by the debtor less the amount payable under any substituted or delayed coverage issued to the debtor.

H. In the event of the death of a debtor who is covered for both credit life and credit health insurance, the credit health insurance may not be deemed to have terminated by the performance of the insurance contract by reason of the debtor's death. In this case, the insurer shall make the appropriate refund for the health insurance coverage which terminated at the date of death.