Sec. 31.13.03.14. Refunds

A. In event of termination of the insurance before the scheduled maturity date of the indebtedness, the insurer promptly shall refund or credit to the person entitled to it the appropriate portion of any premiums paid for the insurance.

B. In the case of monthly premium credit involuntary unemployment benefit insurance, the amount of the refund or credit may not be less than the pro rata gross unearned premium.

C. Single Premium Credit Insurance.

(1) In the case of single premium credit involuntary unemployment benefit insurance, the amount of the refund or credit may not be less than the refund computed by the sum of the digits method commonly known as the Rule of 78.

(2) The insurer may not reduce the amount of the refund based on the amounts of benefit paid.

D. Calculation.

(1) At the option of the insurer, refunds under §C of this regulation may be calculated on a daily or on a monthly basis, as may be elected in the filing made by the insurer.

(2) Refunds may be calculated on an approximate daily basis by interpolating pro rata between the values at the beginning and at the end of the month.

(3) For a calculation under §D(2) of this regulation, the insurer shall assume that every month has 30 days.

(4) If refunds are calculated on a monthly basis, a charge may not be made for a period less than 15 days elapsing since the last monthly installment due date. If the period elapsing since the last monthly installment due date is 15 days or more, a charge may be made for the full month.

E. A premium refund is not required under §A of this regulation if the sum of the refunds on all insurance issued to the debtor by an insurer in connection with the loan would be less than $1.

F. If a refund or credit is due to the debtor in accordance with Insurance Article, §13-107(c)(3) or 13-112(b), Annotated Code of Maryland, the amount of refund or credit may not be less than the amount paid by the debtor, less the amount payable under any substituted or delayed coverage issued to the debtor.

G. Death of Debtor. In the event of the death of a debtor who is covered for credit involuntary unemployment benefit insurance:

(1) The credit involuntary unemployment benefit insurance may not be deemed to have terminated by the performance of the insurance contract by reason of the debtor's death; and

(2) The insurer shall make the appropriate refund for the credit involuntary unemployment benefit insurance coverage that terminated at the date of death.