California Insurance Code

§ 779.33

INS § 779.33Div. 1 · Part 2 · Ch. 1 · Art. 5.9

Statute text

The use of compensating balances or special deposit accounts in connection, either directly or indirectly, with a credit life insurance program or a credit disability insurance program of a credit institution, whether on a group or an individual basis, is prohibited. Compensating balances or special deposit accounts include, but not to the exclusion of other types of balances and accounts, the following:

(1)The deposit of premiums to the account of the insurer in the financial institution for which the insurer provides the credit insurance program, when the account is either noninterest bearing or at a rate of interest less than usual or is controlled by the institution.

(2)Remitting premiums to the insurer after the expiration of the grace period on a regular basis so that the arrearage period is constant.

…

Legislative history

Added by Stats. 1985, Ch. 1316, Sec. 4.