Mich. Admin. Code R. 550.211 - Credit life insurance prima facie rates
Rule 11.
(1) Single
life credit life insurance prima facie premium rates for the insured portion of
an indebtedness repayable in equal monthly installments, where the insured
portion of the indebtedness decreases uniformly by the amount of the monthly
installment paid, shall be as set forth in subdivisions (a) and (b) of this
subrule. Single life credit life insurance prima facie premium rates, when the
benefit provided is level term, shall be as set forth in subdivisions (a) and
(c) of this subrule. Subdivisions (e) and (f) of this subrule refer to prima
facie premium rates for other types of benefits either alone or in combination
with the types of benefits applicable to subdivisions (a), (b), and (c) of this
subrule. Subdivisions (a) to (g) read as follows:
(a) If premiums are payable on the monthly
outstanding balance basis, the premium rate shall be the following amounts per
month per $1,000.00 of outstanding balance:
(i) .8000 commencing September 1,
1987.
(ii) .7692 commencing
September 1, 1988.
(iii) .7385
commencing September 1, 1989, and continuing thereafter.
(b) If premiums are payable on a single
premium basis, where the benefit provided is decreasing term, the single
premium rates shall be as follows:
(i) Where
the term of insurance equals 12 months, the 12-month single-term premium (SP12)
shall equal the following amounts per $100.00 of initial insured indebtedness:
(A) .52 commencing September 1,
1987.
(B) .50 commencing September
1, 1988.
(C) .48 commencing
September 1, 1989, and continuing thereafter.
(ii) Where the term of insurance is different
than 12 months, SP=SP12 x n/12, where SP is the single-term premium per $100.00
of initial insured indebtedness for insurance with a term different than 12
months, and n is the term of insurance in months.
(c) If premiums are payable on a single
premium basis, where the benefit provided is level term, the single premium
rates shall be as follows:
(i) Where the term
of insurance equals 12 months, the 12-month single-term premium (SP12) shall
equal the following amounts per $100.00 of initial insured indebtedness:
(A) .96 commencing September 1,
1987.
(B) .92 commencing September
1, 1988.
(C) .89 commencing
September 1, 1989, and continuing thereafter.
(ii) Where the term of insurance is different
than 12 months, SP=SP12 x n/12, where SP is the single-term premium per $100.00
of initial insured indebtedness for insurance with a term different than 12
months, and n is the term of insurance in months.
(d) Coverage may be offered at the insurer's
option, based on either the monthly outstanding balance basis or single premium
basis.
(e) The joint credit life
rate on the basis specified in subdivision (a), (b), or (c) of this subrule
shall be 1.5625 times the specific rate for that type of coverage.
(f) A combination of the appropriate rate for
level term and the appropriate rate for decreasing term, with equal decrements,
shall be used if coverage provided is a combination of level term and
decreasing term, with equal decrements.
(g) If the benefits provided are other than
those described in subdivisions (a) to (f) of this subrule, rates for such
benefits shall be actuarially consistent with the rates provided in
subdivisions (a), (b), (c), and (e) of this subrule.
(2) In connection with indebtedness that is
repayable over a period of more than 120 months, when written on a single
premium basis, the premium or other identifiable charge for credit life
insurance shall be calculated to insure the scheduled amount required to
liquidate the indebtedness, exclusive of any unearned interest or finance
charge. In connection with indebtedness that is repayable over a period of more
than 120 months, when written on a monthly outstanding balance basis, the
premium or other identifiable charge for credit life insurance shall be
calculated to ensure the actual amount required to liquidate the indebtedness,
exclusive of any unearned interest or finance charge.
(3) The premium rates in subrule (1) of this
rule shall apply to all policies which provide credit life insurance, which are
issued with or without evidence of insurability, which are offered to all
eligible debtors, and which do not contain any of the following:
(a) Exclusions, other than suicide within 1
year of the incurred indebtedness.
(b) Age restrictions, other than age
restrictions that make debtors who are 71 or over ineligible for initial or
continued coverage.
(c) An actively
at work test other than one which requires that a debtor is or has been, for
the previous 2 weeks, either regularly working a 30-hour week or more or is
able to do so.
(4) Any
underwriting decision shall be made within 60 days of the application for
insurance. An insurer shall not engage in post-claim underwriting.
(5) The premium rates in subrule (1) of this
rule shall also apply to all policies which provide credit life insurance,
which are to be issued without underwriting, except underwriting that is based
upon age, and which do not contain any of the following:
(a) Age restrictions, other than age
restrictions that make debtors who are 71 or over ineligible for initial or
continued coverage.
(b) A provision
excluding or denying a claim for death resulting from preexisting conditions,
except for those conditions for which the insured debtor received diagnosis or
treatment within 6 months preceding the effective date of the debtor's coverage
and which caused loss within the 6 months following the effective date of the
coverage.
Notes
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