18 Del. Admin. Code § 1701-2.0

Current through Register Vol. 28, No. 5, November 1, 2024

Section 1701-2.0 - Prima Facie Acceptable Credit Insurance Rates

2.1 It shall be presumed that premium rates charged or to be charged are not excessive in relation to the benefits if the premiums or premium rates as filed with the Commissioner do not exceed the following, or actuarially equivalent, rates:

2.1.1 Credit Life Insurance:

2.1.1.1 For decreasing term credit life insurance, a single premium of 650 per annum per $100 of initial insured indebtedness. A premium payable monthly at the rate of $1.00 per $1000 of outstanding unpaid insured indebtedness will be deemed the actuarial equivalent of the foregoing rate.

2.1.1.2 For level term credit life insurance a single premium of $1.22 per annum per $100 of initial indebtedness pursuant to 18 Del.C. § 3704. Note exception in 18 Del.C. § 3708.

2.1.1.3 The premium rates specified are presumed not excessive only in relation to a plan of death benefits, with or without requirements for evidence of insurability:

2.1.1.3.1 which contains no exclusions, exceptions or limitations on coverage other than for suicide within one year from the effective date of insurance;

2.1.1.3.2 which contains no age restrictions, or only age restrictions making ineligible for the coverage, debtors 65 or over at the time the indebtedness is incurred.

2.1.2 Credit Health Insurance:

2.1.2.1 For credit health insurance the following single premium rates per $100 initial insured indebtedness:

	Benefits Not Retroactive Elimination Period			Retroactive Benefits Waiting Period
No. of Months in Which in the Indebtedness Is Repayable in Equal Installments	7 Days	14 Days	30 Days	7 Days	14 Days	30 Days
2	.70			1.30
3	1.00	.60	.30	1.80	1.30	$.90
6	1.50	1.00	.40	2.50	1.80	1.30
12	2.00	1.40	.80	3.00	2.20	1.70
18	2.50	1.80	1.20	3.50	2.60	2.10
24	3.00	2.20	1.60	4.00	3.00	2.50
30	3.50	2.60	2.00	4.50	3.40	2.90
36	4.00	3.00	2.40	5.00	3.80	3.30
42	4.40	3.30	2.70	5.40	4.10	3.60
48	4.70	3.50	2.90	5.70	4.30	3.80
54	5.00	3.70	3.10	6.00	4.50	4.00
60	5.30	3.90	3.30	6.30	4.70	4.20

2.1.2.2 Rates for policies of credit health insurance on which premiums are paid other than on a single premium basis or for benefits or durations on a basis other than illustrated above shall be actuarially consistent with the rates specified above.

2.1.2.3 The premium rates specified are for policies which contain no exclusion for pre-existing conditions except for those conditions which were manifested requiring medical diagnosis or treatment within the six months preceding the effective date of the insurance and which caused loss within the six months following the effective date of the insurance; provided, however, that disability commencing thereafter resulting from such conditions shall be covered.

2.1.2.4 Any contract to which the foregoing rates apply may contain provisions excluding or restricting coverage in the event of total disability resulting from pregnancy, intentionally self-inflicted injuries, foreign travel or residence, or flight in non-scheduled aircraft. It is not anticipated that military personnel will be sold accident and health insurance except in unusual cases and the company and/or agent shall stand ready to justify any such sale. The policy may contain the same age limitation for eligibility as set forth for credit life policies.

2.1.3 Restricted Coverages:

2.1.3.1 If a credit life or credit health insurance form provides for coverages which are more restrictive than provided for in section 2.1.1.3 or 2.1.2.3 above, the insurer shall demonstrate to the satisfaction of the Commissioner that the schedule of premium rates applicable to such forms will, or can reasonably be expected to, produce a loss ratio of 50% in accordance with the basic test set forth in section 1.0.

2.1.4 Deviation From Prima Facie Acceptable Credit Insurance Rates:

2.1.4.1 An insurer may file and receive approval of a different premium rate or a schedule of premium rates to be used in connection with a particular policy form providing insurance on the debtors of a creditor or a class or classes of debtors, if the insurer demonstrates to the satisfaction of the Commissioner that the prima facie acceptable rates, if used with such forms will or can reasonably be expected to produce a loss ratio of 60% or more. The insurer may use said deviated rates for a period two years. Prior to the expiration of the two-year period the insurer must submit evidence satisfactory to the Commissioner justifying the continued use of said rates for an additional two-year period, provided that a loss ratio of not less than 60% shall not be considered for purposes of an upward deviation.

2.1.5 Downward Rate Adjustments:

2.1.5.1 If the Commissioner has reason to believe that any premium rate or schedule of premium rates theretofore approved by him is producing a loss ratio of less than 50%, the Commissioner may require the insurer to show cause why the premium rate or schedule of premium rates should not be adjusted so as to produce a loss ratio of 50% in accordance with section 1.0.

2.1.6 Filing of Experience Information:

2.1.6.1 Insurers doing credit life and/or credit health insurance business in this State shall annually file with the Insurance Department a report of its credit life insurance experience and credit health insurance experience separately on forms prescribed by the Commissioner, and set forth in Appendix A of this regulation. (See Bulletin No. 75-13. Page 1206.)

18 Del. Admin. Code § 1701-2.0