Section 1026.36 prohibits financing credit insurance, directly or indirectly. Your plan involves direct financing. That’s a problem.
On May 10th the CFPB announced they were delaying this section beyond the June 1, 2013 effective date and making changes to the monthly payment provisions. There was no detail on the changes. Keep an eye on my Blog. When anything further is published I will address it in an article. You may get lucky and find some relief.