State RegulationsNY specificDifficulty 2/5
A consumer lending company in Manhattan wants to offer credit accident and health insurance to its borrowers. Under N.Y. Ins. Law §4235, what relationship forms the basis of this eligible group?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under N.Y. Ins. Law §4235, persons who are debtors of a common creditor form an eligible group for group credit accident and health insurance, which insures the borrowers' loan obligations if a debtor dies or becomes disabled. The common creditor-debtor relationship is the statutory bond that supports issuing this coverage on a group basis.
Why the other options are wrong
- A) Shared occupation is not the connecting basis for credit coverage; the defining relationship is the loan itself.
- B) Shared residence in a county is not an eligible group basis under §4235; geography alone does not create the required bond.
- D) A promotional mailing list creates no eligible group; the statute requires a genuine creditor-debtor connection.
Memory hook
Credit A&H bonds borrowers to their common creditor.