Marcia Hultman

Cabinet Secretary

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Division of Insurance - Producer Information

Limited Lines Credit Insurance

Limited lines credit insurance is credit life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, guaranteed automobile protection (GAP) insurance and any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing the credit obligation that the Director of Insurance determines should be designated a form of limited line credit insurance.

No exam or continuing education is required for limited line credit insurance.

Each insurer who sells, solicits or negotiates any form of credit insurance shall provide the business entity a program of instruction that must be administered for each employee of the business entity whose duties include selling, soliciting or negotiating any form of credit insurance.

Some insurers have filed their credit insurance programs as a "group" insurance product in which a master policy is issued to the lending institution and those consumers sold credit insurance are issued a participating certificate rather than an original policy. This concept does not qualify for the "enrollment of benefits in a group plan" exemption as there is no employer/employee relationship between the lender and the borrower. The limited lines credit insurance exemption is intended only for a true group enrollment in a plan sponsored by the employer on behalf of its employees.

Limited lines credit insurance includes GAP insurance. This type of insurance previously required a casualty insurance license but is now defined in law as a credit insurance product.

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