Or. Admin. Code § 836-060-0026

Current through Register Vol. 63, No. 12, December 1, 2024

Section 836-060-0026 - Credit Life Insurance Rates

(1) Unless data submitted to the Director under OAR 836-060-0043 justify a higher rate in the Director's opinion, credit life insurance premium rates for the insured portion of an indebtedness repayable in equal monthly installments, when the insured portion of the indebtedness decreases uniformly by the amount of the monthly installment paid, shall not exceed the rates ("prima facie" rates) set forth in subsections (a) and (b) of this section. Subsections (c), (d) and (e) of this section prescribe the corresponding "prima facie" premium rates for other types of credit life insurance benefits. The prima facie premium rates are as follows:

(a) $.65 per month per $1,000 of outstanding insured indebtedness, if premiums are payable on a monthly outstanding balance basis ($.59 if underwritten);

(b) If premiums are payable on a single premium basis and the amount of the insurance decreases in equal monthly amounts, the prima facie rates per $100 of initial insured indebtedness shall equal:

(A) $.42 per year on credit terms of 63 months or less ($.38 if underwritten); and

(B) On credit terms over 63 months (n+1)

20

times $.65 ($.59 if underwritten), where n is the credit term in months. The rates so calculated are to be immediately rounded to two-decimal precision, i.e. to the nearest cent.

(c) If premiums are payable on a single premium basis and the benefit provided is level term, the prima facie rate is $.76 per $100 ($.68 if underwritten) of insured indebtedness per year of term. The rate for a fractional part of a year shall be calculated pro rata and immediately rounded to two-decimal precision, i.e. to the nearest cent.

(d) The joint coverage rate shall be 165% of the rounded rate for single person coverage;

(e) If coverage is a combination of level term and decreasing term with equal decrements, the rate shall be a combination of the appropriate rate for level term and the appropriate rate for decreasing term with equal decrements;

(f) For coverage for outstanding indebtedness when only the principal is insured and the interest is paid on a scheduled basis to provide equal monthly repayments of indebtedness (simple interest loans), the premium shall be actuarially consistent with other premiums calculations described in this rule;

(g) For other benefits, except for benefits described in subsection (2)(e), of this rule, rates shall be actuarially consistent with the rates specified in this section.

(2) The premium rates in section (1) of this rule apply to credit life insurance policies that are issued without underwriting or with underwriting for high risk conditions that have the potential of becoming terminal during the period of coverage, and that are offered to all debtors. Such policies:

(a) Shall not contain exclusions other than suicide within six months following the effective date of coverage for the insured person. If a suicide exclusion is used, the exclusion shall not be effective for more than six months following the effective date of coverage for the insured person. With respect to an exclusion under this subsection:

(A) Except as provided in paragraph (B) of this subsection, the effective date of insurance coverage applicable to an indebtedness is the date on which the individual policy or certificate of coverage was first issued; and

(B) An individual policy for an open-end plan or a certificate of coverage under a group policy for an open-end plan may provide that the effective date of coverage of a specific advance or charge, for the amount in excess of the first $3,000 of account balance, is the date of the specific advance or charge;

(b) Shall not contain age restriction other than age restrictions making ineligible for coverage debtors 66 or over at the time the indebtedness is incurred and may provide that all insurance will terminate upon attainment by the debtor of a specified age not less than 66 years;

(c) Shall not contain a provision excluding or denying a claim for death resulting from a preexisting condition except for those conditions for which the insured debtor received medical diagnosis or treatment within six months preceding the effective date of coverage and which directly contributed to the death of the insured debtor within six months following the effective date of coverage. For purposes of this subsection:

(A) Except as provided in paragraph (B) of this subsection, the effective date of insurance coverage applicable to an indebtedness is the date on which the individual policy or certificate of coverage was first issued; and

(B) An individual policy for an open-end plan or a certificate of coverage under a group policy for an open-end plan may provide that the effective date of coverage of a specific advance or charge, for the amount in excess of the first $3,000 of account balance, is the date of the specific advance or charge; and

(d) May contain additional benefits to policyholders and their debtors, such as dismemberment, partial disability and other benefits of small economic value to the consumer, but an insurer shall not pass on the charge for such coverage to the debtor so as to increase the total rate to exceed the rate established by this rule.

Or. Admin. Code § 836-060-0026

IC 7-1982, f. 2-12-82, ef. 6-1-82; Repealed by IC 13-1982, f. 11-30-82, ef. 12-1-82; IC 1-1983, f. 1-28-83, ef. 2-1-83; ID 24-1990, f. 12-28-90, cert. ef. 1-1-91; ID 12-2000, f. 11-14-00, cert. ef. 1-1-01

Stat. Auth.: ORS 731.244

Stats. Implemented: ORS 742.003 & ORS 742.005