Definition of gross debt -- Credit personal property insurance -- Restrictions and requirements

Restrictions and requirements. (1) As used in this section, "gross debt" means the sum of the remaining payments owed to a creditor by a debtor. (2) For credit personal property insurance sold in conjunction with a closed-end credit transaction, an insurer shall not issue the insurance: (a) In an amount that exceeds the gross debt of the underlying credit transaction; or (b) With a term that exceeds the scheduled term of the underlying credit transaction. (3) Credit personal property insurance shall cover a substantial risk of loss of, or damage to, the collateral pledged or secured in the credit transaction. (4) An insurer shall not: (a) Require the bundling of other credit insurance coverages with the purchase of credit personal property insurance; or (b) Use gross debt in determining credit personal property insurance premiums. (5) A debtor shall have the choice to purchase credit personal property insurance separate from other credit insurance coverage.