17:16V-7 Cause of action not created to debtor or third party; remedy; exempt transactions.
7. a. A creditor that places, or a person that receives commissions or fees arising out of, collateral protection insurance shall not be liable to any debtor, guarantor or other party for the placement of collateral protection insurance, except if the purchase of collateral protection insurance is the result of error by the creditor. If the creditor does not substantially comply with the provisions of this act in purchasing collateral protection insurance, the sole and exclusive remedy of the debtor is that the debtor does not have to pay for the insurance and any associated creditor fees or costs. A creditor is not, by virtue of this act, required to purchase collateral protection insurance or otherwise insure collateral.
b.This act shall not create a cause of action to the debtor or any third party:
(1)for the purchase or placement of collateral protection insurance in substantial compliance with the terms of this act;
(2)for not purchasing collateral protection insurance;
(3)as a result of the amount or level of coverage, geographical scope of coverage or deductible associated with collateral protection insurance purchased by the creditor;
(4)because the creditor purchases collateral protection insurance that protects only the interest of the creditor or less than all of the interest of the debtor; or
(5)nondisclosure of commissions or fees included in costs.
c.The list under subsection b. of this section does not imply that a cause of action is otherwise created by this act.
d.This act shall not apply to credit transactions involving extensions of credit primarily for business, commercial or agricultural purposes, and shall not be deemed to regulate or limit the rights of the parties to a business, commercial or agricultural transaction to contract for terms and provisions regarding insurance otherwise not prohibited by law.
L.1999,c.44,s.7.
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Last modified: October 11, 2016