The following provisions apply to insurance provided or to be provided in relation to a consumer credit transaction: [PL 1997, c. 315, §6 (NEW).]
1. A creditor may not contract for or receive a separate charge for insurance against loss of or damage to property unless:
A. The insurance covers a substantial risk of loss of or damage to property related to the credit transaction; [PL 1973, c. 762, §1 (NEW).]
B. The amount, terms and conditions of the insurance are reasonable in relation to the character and value of the property insured or to be insured; [PL 1973, c. 762, §1 (NEW).]
C. The term of the insurance is reasonable in relation to the term of credit. [PL 1973, c. 762, §1 (NEW).]
2. The term of the insurance is reasonable if it is customary and does not extend substantially beyond a scheduled maturity.
3. With respect to a transaction, except pursuant to open-end credit, a creditor may not contract for or receive a separate charge for insurance against loss of or damage to property, unless the amount financed exclusive of charges for the insurance is $1,400 or more and the cash price of the item or property is $1,400 or more.
4. With respect to a transaction pursuant to open-end credit, the administrator may adopt rules consistent with the principles set out in subsections 1 and 2 prescribing whether, and the conditions under which, a creditor may contract for or receive a separate charge for insurance against loss of or damage to property.
5.