Page:United States Statutes at Large Volume 102 Part 3.djvu/1016

 102 STAT. 2968

PUBLIC LAW 100-583—NOV. 3, 1988

SEC. 6 INSURANCE PROVIDED IN CONNECTION WITH CERTAIN OPEN END . CREDIT CARD PLANS. Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended by inserting after subsection (f) (as added by section 2(a) of this Act) the following new subsection: "(g) INSURANCE IN CONNECTION WITH CERTAIN OPEN END CREDIT CARD PLANS.— "(1) CHANGE IN INSURANCE CARRIER.—Whenever a card issuer

that offers any guarantee or insurance for repayment of all or part of the outstanding balance of an open end credit card plan proposes to change the person providing that guarantee or insurance, the card issuer shall send each insured consumer written notice of the proposed change not less than 30 days prior to the change, including notice of any increase in the rate or substantial decrease in coverage or service which will result from such change. Such notice may be included on or with the monthly statement provided to the consumer prior to the month in which the proposed change would take effect. "(2) NOTICE OF NEW INSURANCE COVERAGE.—In any case in which a proposed change described in paragraph (1) occurs, the insured consumer shall be given the name and address of the new guarantor or insurer and a copy of the policy or group certificate containing the basic terms and conditions, including the premium rate to be charged. "(3) RIGHT TO DISCONTINUE GUARANTEE OR INSURANCE.—The

notices required under paragraphs (1) and (2) shall each include a statement that the consumer has the option to discontinue the insurance or guarantee. "(4) No PREEMPTION OF STATE LAW.—No provision of this subsection shall be construed as superseding any provision of State law which is applicable to the regulation of insurance. "(5) BOARD DEFINITION OF SUBSTANTIAL DECREASE IN COVERAGE

15 USC 1637

OR SERVICE.—The Board shall define, in regulations, what constitutes a 'substantial decrease in coverage or service' for purposes of paragraph (1).". SEC. 7. EFFECTIVE DATE. Any regulation required to be prescribed by the Board under the amendments made by section 2 shall— (1) take effect not later than the end of the 150-day period beginning on the date of the enactment of this Act; and (2) apply only with respect to applications, solicitations, and other material distributed after the end of the 150-day period beginning after the end of the period referred to in paragraph (1), except that— (A) in the case of applications and solicitations subject to paragraph (3) or (4)(C) of section 127(c) of the Truth in Lending Act (as added by section 2), such period shall be 240 days; and (B) any card issuer may, at its option, comply with the requirements of the amendments made by this Act prior to the applicable effective date, in which case the amendments made by this" Act shall be fully applicable to such card issuer.

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