§ 536.26

536.26 Insured loans. 1. A licensee shall not, directly or indirectly, sell or offer for sale any life or accident and health insurance in connection with a loan made under this chapter except as and to theextent authorized by this section. Life, accident and health insurance, or any of them, maybe written by a licensed insurance producer upon or in connection with any loan for a termnot extending beyond the final maturity date of the loan contract, but only upon one obligoron any one loan contract. 2. The amount of life insurance shall at no time exceed the unpaid balance of principal and interest combined which are scheduled to be outstanding under the terms of the loancontract or the actual amount unpaid on the loan contract, whichever is greater. 3. Accident and health insurance shall provide benefits not in excess of the unpaid balance of principal and interest combined which are scheduled to be outstanding under the terms ofthe loan contract and the amount of each periodic benefit payment shall not exceed the totalamount payable divided by the number of installments and shall provide that if the insuredobligor is disabled, as defined in the policy, for a period of more than

it payment shall not exceed the totalamount payable divided by the number of installments and shall provide that if the insuredobligor is disabled, as defined in the policy, for a period of more than fourteen days, benefitsshall commence as of the first day of disability. 4. The premium, which shall be the only charge for the insurance, shall not exceed that approved by the commissioner of insurance of the state of Iowa as filed in the office of suchcommissioner. Such charge, computed at the time the loan is made for the full term of theloan contract on the total amount required to pay principal and interest. 5. If a borrower procures insurance by or through a licensee, the licensee shall cause to be delivered to the borrower a copy of the policy within fifteen days from the date such insuranceis procured. No licensee shall decline new or existing insurance which meets the standardsset out in this section nor prevent any obligor from obtaining such insurance coverage fromother sources. 6. If the loan contract is prepaid in full by cash, a new loan, or otherwise, except by the insurance, any life, accident, and health insurance procured by or through a licenseeshall be canceled and

6. If the loan contract is prepaid in full by cash, a new loan, or otherwise, except by the insurance, any life, accident, and health insurance procured by or through a licenseeshall be canceled and the unearned premium shall be refunded. The amount of the refundshall represent at least as great a proportion of the insurance premium or identifiablecharge as the sum of the consecutive monthly balances of principal and interest of the loancontract originally scheduled to be outstanding after the installment date nearest the dateof prepayment bears to the sum of all such monthly balances of the loan contract originallyscheduled to be outstanding. [C66, 71, 73, 75, 77, 79, 81, §536.26]85 Acts, ch 158, §7; 2001 Acts, ch 16, §33, 37; 2016 Acts, ch 1011, §106; 2023 Acts, ch 66, §138 Subsection 5 amended Sat Dec 23 01:39:06 2023 Iowa Code 2024, Section 536.26 (19, 1)