Cost of Borrowing (Foreign Insurance Companies) Regulations
16 (1) A disclosure statement made in relation to a credit agreement under which optional services, including insurance services, are provided on an on-going basis must specify that
(a) the borrower may cancel the optional service by notifying the foreign company that the service is to be cancelled effective as of the day that is the earlier of one month after the day that the disclosure statement was provided to the borrower, determined in accordance with subsection 6(6), and the last day of a notice period provided for in the credit agreement; and
(b) the foreign company shall, without delay, refund or credit the borrower with the proportional amount, calculated in accordance with the formula set out in subsection (2), of any charges for the service paid for by the borrower or added to the balance of the loan, but unused as of the cancellation day referred to in the notice.
(2) The proportion of charges to be refunded or credited to a borrower shall be determined in accordance with the formula
R = A × ((n-m)/n)
where
- R
- is the amount to be refunded or credited;
- A
- is the amount of the charges;
- n
- is the period between the imposition of the charge and the time when the services were, before the cancellation, scheduled to end; and
- m
- is the period between the imposition of the charge and the cancellation.
(3) Subsection (1) is subject to any provincial laws that apply to the cancellation of services that are referred to in that subsection.
- Date modified: