MISSOURI STATUTES
TITLE XXVII. DEBTOR--CREDITOR RELATIONS
CHAPTER 427. CREDITOR PROTECTION
COLLATERAL PROTECTION ACT
§ 427.115 Definitions
In sections 427.110 to 427.190, unless the context otherwise requires, the following words and phrases shall mean:
(2) "Collateral protection coverage":
(a) Insurance coverage that is:
a. Purchased unilaterally by a creditor subsequent to the date of a credit agreement;
b. Purchased to provide monetary protection against loss of or damage to the collateral or against liability arising out of the ownership or use of the collateral;
c. Purchased according to the terms of a credit agreement as a result of a debtor's failure to provide evidence of insurance or failure to maintain adequate insurance to cover the collateral, with the costs of such insurance, including interest and any other charges imposed by the creditor in connection with the placement of such insurance, payable by the debtor; and
d. Purchased to protect only the interest of the creditor or insurance coverage that is purchased to protect both the interest of the creditor and some or all of the interest of the debtor. The term of such coverage may, but need not, extend to the full term of the credit transaction;
(b) Does not include insurance coverage that is:
a. Purchased by the creditor and not chargeable to the debtor;
b. Purchased at the inception of a credit transaction to which the debtor is a party or agrees to the insurance coverage, whether or not the costs are included in any payment plan under the credit transaction;
c. Purchased by the creditor following foreclosure, repossession, or a similar event wherein the creditor gains possession or control over the collateral;
d. Maintained by the creditor for the protection of any or all collateral which may come into the possession or control of the creditor through foreclosure, repossession, or a similar event;
e. Credit insurance, mortgage protection insurance, insurance issued to cover the life or health of the debtor, or any other insurance maintained to cover the inability or failure of the debtor to make payment under the credit agreement, including any insurance governed by chapter 385, RSMo;
f. Title insurance;
g. Flood insurance required to be placed by creditors by 42 U.S.C. 4012(a), as amended, pursuant to the National Flood Insurance Reform Act of 1994; or
h. Conditioned upon the default or delinquency of the debtor's loan payments, or the repossession of the collateral;
MISSOURI STATUTES
TITLE XXVII. DEBTOR--CREDITOR RELATIONS
CHAPTER 427. CREDITOR PROTECTION
COLLATERAL PROTECTION ACT
§ 427.120 Collateral protection coverage, conditions
For protection under sections 427.110 to 427.190, a creditor may place collateral protection coverage provided the following conditions are met:
(1) The debtor has entered into a credit transaction with the creditor;
(2) The credit transaction has been reduced to a credit agreement, and the credit agreement requires the debtor to maintain insurance on the collateral; and
(3) A notice substantially similar to the following has been included in the credit agreement or on a separate document provided to the debtor at the time the credit agreement is entered: "Unless you provide evidence of the insurance coverage required by your agreement with us, we may purchase insurance at your expense to protect our interests in your collateral. This insurance may, but need not, protect your interests. The coverage that we purchase may not pay any claim that you make or any claim that is made against you in connection with the collateral. You may later cancel any insurance purchased by us, but only after providing evidence that you have obtained insurance as required by our agreement. If we purchase insurance for the collateral, you will be responsible for the costs of that insurance, including the insurance premium, interest and any other charges we may impose in connection with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance may be added to your total outstanding balance or obligation. The costs of the insurance may be more than the cost of insurance you may be able to obtain on your own."
MISSOURI STATUTES
TITLE XXVII. DEBTOR--CREDITOR RELATIONS
CHAPTER 427. CREDITOR PROTECTION
COLLATERAL PROTECTION ACT
§ 427.135 Cancellation of collateral protection coverage, when -- other insurance
1. Any collateral protection coverage purchased unilaterally by the creditor subsequent to the date of the credit agreement shall be canceled whenever and for so long as:
(1) The debtor has in place substitute insurance of at least the level of coverage required by the credit agreement to protect the collateral; and
(2) The debtor is able to provide the creditor with proper evidence of such coverage.
2. If, within thirty days after notice is sent pursuant to subsection 1 or 2 of section 427.125, a debtor provides the creditor with proper evidence that the debtor had insurance on the collateral as required by the credit agreement on the date the collateral protection became effective and that the debtor continues to have insurance on the collateral as required by the credit agreement, the creditor shall cancel the coverage that it purchased and may not charge the debtor any costs, including insurance premiums, interest, or other charges in connection with the coverage.
MISSOURI STATUTES
TITLE XXVII. DEBTOR--CREDITOR RELATIONS
CHAPTER 427. CREDITOR PROTECTION
COLLATERAL PROTECTION ACT
§ 427.125 Notice of placement of insurance--form--grace period--repayment terms
1. Within thirty calendar days following the placement of collateral protection coverage, the creditor shall mail to the debtor at the last known address of any such person, a notice entitled "Notice of Placement of Insurance" in a form substantially similar to the following:
"NOTICE OF PLACEMENT OF INSURANCE
Your credit agreement with us requires you to maintain adequate insurance on your collateral until you pay off your credit agreement. You have not given us proof that you have adequate insurance on your collateral. Under the terms of your credit agreement, we have purchased insurance at your expense to protect our interests in your collateral.
The insurance we purchased will pay claims made by us as the creditor. The insurance we purchased may not pay any claims made by you or against you in connection with your collateral.
You are responsible for the costs of this insurance, including the insurance premium, interest and any other charges we may impose in connection with the purchase of this insurance. The costs of this insurance may be more than insurance you can buy on your own.
You still may obtain insurance of your own choosing on the collateral. If you provide us with proof that you have obtained adequate insurance on your collateral, we will cancel the insurance that we purchased and refund or credit any unearned premiums to you. If, within thirty days after the date this notice was sent to you, you provide us with proof that you had adequate insurance on your collateral as of the date we purchased or placed insurance on this debt and that you continue to have the insurance that you purchased yourself, we will cancel the insurance that we purchased without charging you any costs, interest, or other charges in connection with the insurance that we purchased."
2. Provided the creditor otherwise complies with subsection 1 of this section, a creditor may extend a grace period for sixty days or more from the date the debtor defaults on providing proof of insurance in which case collateral protection insurance placed at the expiration of the grace period may include a premium charge for such coverage retroactive to the date the debtor defaulted on the obligation to provide proof of insurance. If such a premium charge is included, the creditor shall amend the notice required by subsection 1 of this section to reflect that the creditor will cancel the insurance with no cost to the debtor only if the debtor provides proof of insurance that was effective as of the first day of the grace period.
3. The terms for repayment of the costs of the collateral protection coverage, which shall include interest and any other charges imposed by the creditor in connection with the placement of the collateral protection coverage, shall include one or more of the following:
(1) Full payment within thirty days after the date of the Notice of Placement of Insurance;
(2) A final balloon payment within thirty days after the last scheduled payment required by the credit agreement; or
(3) Full amortization over the term of the credit transaction, the term of the collateral protection insurance policy, or the term for which amortization is used by the creditor.
MISSOURI STATUTES
TITLE XXVII. DEBTOR--CREDITOR RELATIONS
CHAPTER 427. CREDITOR PROTECTION
COLLATERAL PROTECTION ACT
§ 427.140 Refund of unearned premiums
Upon cancellation or expiration of collateral protection coverage, the amount of unearned premiums, if any, as calculated in accordance with the policy approved by the department of insurance as permitted by law, shall be refunded to the debtor. The amount of unearned premiums, however, may not be calculated by the rule of 78 or sum of the digits method. A refund of unearned premiums may be credited to the debtor's obligation under the credit agreement or distributed directly to the debtor by check or other means.
MISSOURI STATUTES
TITLE XXVII. DEBTOR--CREDITOR RELATIONS
CHAPTER 427. CREDITOR PROTECTION
COLLATERAL PROTECTION ACT
§ 427.150 Liability, placement of collateral protection coverage--notices and coupon books where mailed, to whom
A creditor that places collateral protection coverage in substantial compliance with the terms of sections 427.110 to 427.190 shall not be directly or indirectly liable in any manner to a debtor, co-signor, guarantor, or any other person in connection with the placement of the collateral protection coverage. Notices and coupon books required to be mailed to a debtor under sections 427.110 to 427.190 are not required to be mailed to any person other than to the debtor, and shall be mailed first class, postage prepaid, to the debtor's last known address on file with the creditor.
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