Offering Credit Life Insurance Products
Creditors, including licensed mortgage lenders, are permitted to offer credit life, credit accident and health, and credit involuntary unemployment insurance pursuant to Mass. Gen. Laws chapter 255, § 12G, and subject to the limitations of Mass. Gen. Laws chapter 175, §§ 110, 117D, and 133. Section 12G also provides that obtaining any of the authorized types of insurance cannot be a condition of obtaining financing and that such insurance cannot be offered in connection with a consumer credit transaction subject to section 12G until the credit decision has been made and communicated to the applicant. Disclosure requirements applicable to insurance premium charges are also set forth under Mass. Gen. Laws chapter 140D and its implementing regulation 209 CMR 32.00 et seq.
Mortgage lenders and brokers are currently prohibited from obtaining a license to sell insurance products pursuant to Mass. Gen. Laws chapter 175, § 174E. However, as stated above such entities may conduct certain business transactions with insurance companies under that statute. The Division of Insurance should be contacted for questions regarding permissible activities under said chapter 175.