(1) To insure debtors of a creditor, a group life insurance policy may be issued to a policyholder who is any of the following: (a) the creditor; (b) the creditor's parent holding company; or (c) trustees or agents designated by two or more creditors. (2) A policy described in Subsection (1) is subject to the requirements of this Subsection (2). (a) (i) The persons eligible for insurance are: (A) all of the debtors of the creditors; or (B) all of any classes of debtors. (ii) The policy may provide that "debtors" includes: (A) borrowers of money, or purchasers or lessees of goods, services, property, rights, or privileges for which payment is arranged through a credit transaction; and (B) the debtors of one or more affiliated corporations, proprietorships, or partnerships under common control with the policyholder. (b) (i) The premiums shall be paid by the policyholder, from: (A) the creditor's funds; (B) charges collected from the insured debtors; or (C) from both Subsections (2)(b)(i)(A) and (B). (ii) Except as provided under Section 31A-22-512, a policy on which no part of the premium is contributed by insured debtors specifically for their insurance shall insure all eligible debtors. (c) (i) To the extent of the creditor's interest, the insurance may be payable to the creditor or to any successor to the right, title, and interest of the creditor. (ii) The payment shall reduce or extinguish the obligation of the debtor to the extent of the payment. (iii) When the amount of insurance exceeds the debt, the excess is payable to a beneficiary other than the creditor named by the debtor, or to the debtor's estate. (d) Group policies issued under this section are not subject to Sections 31A-22-516 through 31A-22-521.
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