Mich. Admin. Code R. 550.212 - Credit accident and health insurance prima facie rates
Current through Vol. 22-05, April 1, 2022
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Rule 12. (1) Credit accident and health 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. Subdivisions (c), (d), and (e) of this subrule refer to prima facie premium rates for other types of benefits either alone or in combination with the type of benefits applicable to subdivisions (a) and
(b) of this subrule. Subdivisions (a) to (f) read as follows:
(a) If premiums are payable on a single premium basis for the duration of the coverage, the premium rates shall be those set forth in appendix A of R 550.117.
(b) If premiums are paid on the basis of the premium rate per month per thousand of outstanding insured indebtedness, the premium rates shall be those set forth in appendix B of R 550.118.
(c) The actuarial equivalent of subdivision (b) of this subrule shall be used if the coverage provided is a constant maximum indemnity for a given period of time.
(d) An appropriate combination of the premium rate for a constant maximum indemnity for a given period of time and the premium rate for a maximum indemnity which decreases in equal amounts per month shall be used if the coverage provided is a combination of a constant maximum indemnity for a given period of time after which the maximum indemnity begins to decrease in equal amounts per month.
(e) If the benefits provided are other than those described in subdivisions (a) to (d) of this subrule, rates for such benefits shall be actuarially consistent with rates provided in subdivisions (b) and (c) of this subrule.
(f) The outstanding balance rate for credit accident and health insurance may be either a term specified rate or may be a single composite term outstanding balance rate applicable to all loans made under an open-end credit plan.
(2) The premium rates specified in subrule (1) of this rule shall apply to all policies which provide credit accident and health insurance, which are to be issued with or without evidence of insurability, which are to be offered to all eligible debtors, and which do not contain any of the following:
(a) A provision excluding or denying a claim for disability resulting from preexisting conditions, except for those conditions for which the insured debtor received medical advice, 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.
(b) Any provision that excludes or restricts liability in the event of disability caused in a specified manner, except that policies may contain provisions excluding or restricting coverage in the event of normal pregnancy, intentionally self-inflicted injuries, and any act of war, declared or undeclared.
(c) An actively at work test which requires that the debtor be employed more than 30 hours per week.
(d) Age restrictions, other than age restrictions that make debtors who are 66 years of age or older ineligible for initial or continued coverage. However, such policies shall contain a daily benefit equal in amount to 1/30 of the monthly benefit payable under the policy for the indebtedness and shall contain a definition of "disability" that is no more restrictive than one requiring that, during the first 12 months of disability, the insured shall be unable to perform the principal duties of his or her occupation at the time the disability occurred and, thereafter, the principal duties of any occupation for which the insured is reasonably suited by education, training, or experience. This requirement regarding the definition of "disability" shall not apply to lump sum accident and health coverage.
(3) Any underwriting decision shall be made within 60 days of the application for insurance. An insurer shall not engage in post-claim underwriting.
(4) If a policy does not contain a provision excluding or denying a claim for disability resulting from preexisting conditions, the premium rates corresponding to those in subrule (1)(a) of this rule shall be as contained in appendix C or appendix D of R 550.119 or R 550.120, and additional rates shall be consistent with the relationship between the premium rates contained in appendix D of R 550.120 and the premium rates contained in appendix B of R 550.118.
History: 1987 MR 6, Eff. Sept. 1, 1987; 1995 MR 1, Eff. Feb. 3, 1995.
Editor's note: The rules of the Insurance Bureau, Department of Commerce, entitled "Credit Insurance Rates, Forms, and Standards," being R 550.101 to R 550.121 and appearing in Issue No. 6 of the 1987 Michigan Register, are renumbered R 550.201 to R 550.221.