HB541 Alabama 2017 Session

Updated Feb 26, 2026

Notable

Summary

Primary Sponsor: Ken Johnson
Republican
Session: Regular Session 2017
Title: Consumer credit transactions, creditors, provision of credit life, disability or involuntary unemployment as joint coverage, Sec. 5-19-20 am'd.
Summary: HB541 lets lenders offer credit life, disability, and involuntary unemployment insurance as joint coverage when multiple people borrow in a single loan.
What This Bill Does
Currently, lenders may offer these insurances as single coverage. The bill adds that joint coverage can also be offered for loans shared by more than one borrower in a single transaction. Premiums and coverage amounts remain tied to the loan’s amount and term, and the same general limits apply as for single coverage. Borrowers can choose to use their own policy, or the lender may purchase the coverage and charge the premium, within approved rate limits.

Who It Affects
Debtors/borrowers in consumer credit transactions with more than one borrower, who can opt for a joint insurance policy rather than separate policies.
Creditors/lenders who offer credit life, disability, and involuntary unemployment insurance, gaining a new option to provide joint coverage and the related premium rules.

Key Provisions
Allows credit life and disability and involuntary unemployment insurance to be offered and provided as joint coverage when credit is extended to more than one party in a single transaction.
Premiums for the insurance must not exceed the permitted premium and coverage must align with the loan’s approximate amount and term; formulas for calculating coverage apply to both single and joint coverage.
Debtors may obtain insured coverage through their own policy; if not, the creditor may purchase it and charge the premium, subject to approved rates.
If the debtor’s policy is not used, the debtor’s estate or named beneficiary remains entitled to any excess credit life insurance benefit.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Consumer Credit