28 Tex. Admin. Code § 3.5502 - Joint Credit Accident and Health Insurance
(a) Joint debtors, for purposes of credit
accident and health insurance written under Insurance Code, Chapter 1153 means
only spouses or business partners, and such persons must be jointly and
severally liable for repayment of the single indebtedness and be joint signers
of the instrument of indebtedness. Endorsers and guarantors are not eligible
for credit insurance coverage. Joint accident and health coverage shall not be
written covering more than two debtors.
(b) Coverage may be provided by either of the
methods set forth in paragraphs (1) and (2) of this subsection:
(1) each debtor is insured for 100% of the
disability payment;
(2) each debtor
is insured for a portion of the disability payment. The total of the portions
shall equal 100% of the disability payment. The joint disability insurance
benefit cannot exceed the amount of insurance that would have been provided if
coverage had been issued on a single debtor.
(c) Joint disability coverage shall be
evidenced by an individual policy or, in the case of group insurance, by a
certificate of insurance. The form shall specify the amount of disability
benefit to be provided on each debtor. The coverage shall not be provided by
two single individual disability policies or by two single group disability
certificates of insurance. Jointly indebted persons shall not both be covered
separately at single accident and health rates.
(d) Joint disability forms shall provide that
if coverage on one of the joint debtors is terminated, the coverage on the
other debtor shall be continued under a single individual disability policy or
a single group disability certificate. Coverage may be terminated for any of
the reasons stated in paragraphs (1) - (4) of this subsection:
(1) the coverage is successfully
contested;
(2) the coverage was
issued in error to a joint insured who exceeded the eligibility age limits and
who correctly stated his age. Under these circumstances, the insurer has the
right to terminate the portion of coverage provided on such insured as long as
the adjustment is handled as set forth in §
3.5106(b) of
this title (relating to Prohibited Provisions and Practices) addressing excess
coverage;
(3) coverage was issued
in error to a joint insured who did not meet the eligibility employment
requirements, if required, and who correctly stated his employment status in
writing. Under these circumstances, the insurer has the right to terminate the
portion of coverage provided on such insured as long as the adjustment is made
as set forth in §
3.5106(b) of
this title addressing excess coverage;
(4) suicide or any other life exclusions, as
set forth in the policy and/or certificate of insurance.
(e) If termination occurs for any of the
reasons set forth in subsection (d)(1) - (3) of this section, the amount of
premium refund required will be equal to the difference between the premium
charged for joint disability coverage and the premium that would have been
charged if only single disability coverage (on a single insured) had been
provided at the time the coverage was originally issued. If termination occurs
for the reason set forth in subsection (d)(4) of this section, the amount of
premium refund required will be equal to the unearned portion, at the date of
death, of the premium charged for joint disability coverage minus the unearned
portion, at the date of death, of the premium that would have been charged if
only single disability coverage (on the single "surviving" insured) had been
provided at the time the coverage was originally issued. The refund for joint
disability coverage is to be paid in addition to the refund for joint life
insurance coverage, in accordance with §
3.5104(a)(2) of
this title (relating to Benefits and Refunds), if joint life coverage was
issued.
(f) If a separate
identifiable premium is charged for the joint disability coverage, and if joint
coverage is desired by the debtors, each debtor must elect and sign for the
joint coverage.
(g) The maximum
premiums to be charged for joint disability coverage when each debtor is
insured for 100% of the disability payment must be equal to the amount set
forth in the latest adopted presumptive premium rates for joint credit
disability coverage. The maximum premiums to be charged for joint disability
coverage when each debtor is insured for a portion of the disability payment,
with the total of the portions equal to 100% of the disability payment, must be
equal to the premium that would have been charged if 100% of the disability
insurance amount was provided on a single life, as set forth in the latest
adopted presumptive premium rates for single life credit disability
coverage.
(h) The annual experience
data reports required under §
3.5701 of this title (relating to
Statistical Data and Annual Experience Calls) shall be submitted as follows:
(1) if joint disability coverage is provided
on each debtor for 100% of the disability payment, the experience data will be
reported as joint disability coverage 1;
(2) if joint disability coverage is provided
on each debtor for a portion of the disability payment, with the total of the
portions equal to 100%, the experience data will be reported as joint
disability coverage 2.
Notes
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