Utah Admin. Code R590-91-7 - Credit Life Insurance Prima Facie Rates

(1) Subsections (3) and (4) refer to credit life insurance prima facie premium rates for the insured portion of an indebtedness payable in equal monthly installments, when the insured portion of the indebtedness decreases uniformly by the amount of the monthly installment paid.

(2) Subsections (5), (6), and (7) refer to the prima facie premium rates for other benefit types alone or in combination with the benefit types in Subsections (3) and (4).

(3) If a premium is payable on a monthly outstanding balance basis, the prima facie rate shall be $0.65 per month per $1,000 of outstanding insured indebtedness.

(4) If a premium is payable on a single premium basis, the single premium prima facie rate per $100 of the initial indebtedness shall be ((N+1)/20)(Op):

(a) N is the credit term in months; and

(b) Op is the rate specified in Subsection (3).

(5) If a premium is payable on a single premium basis when the benefit provided is level term, the single premium prima facie rate per $100 of the initial indebtedness shall be (N/10)(Op):

(a) N is the credit term in months; and

(b) Op is the rate specified in Subsection (3).

(6) The joint coverage rate for Subsection (3), (4), or (5) may not be greater than 170% of the specific rate for the type of coverage.

(7) 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.

(8) If the benefits provided are other than the benefits described in Subsections (1) through (7), the benefit rates shall be actuarially consistent with the rates in Subsections (1) through (7).

(9)

(a) The premium rates in Subsections (1) through (8) shall apply to each credit life insurance policy that is issued with or without evidence of insurability, that is offered to all eligible debtors, and that contains:

(i) no exclusion, except suicide within one year of the incurred indebtedness; and

(ii) either no age restriction or an age restriction making ineligible for coverage:

(A) a debtor age 65 or over at the time the indebtedness is incurred; or

(B) a debtor age 66 or over on the maturity date of the indebtedness.

(b) Insurance written for an open-end credit plan may:

(i) exclude from insurance eligibility debtor classes determined by age; and

(ii) provide for the insurance to stop or reduce the insurance amount when the debtor reaches age 65.

(c) Insurance written for an open-end credit plan where the amount of insurance is based on or limited to the outstanding unpaid balance may not include any provision excluding or denying a claim for death resulting from a preexisting condition, except for a condition that:

(i) the insured debtor received medical diagnosis or treatment within six months before the effective date of coverage; and

(ii) caused or substantially contributed to the insured debtor's death within six months after the effective date of coverage.

(d) The exclusion in Subsection (9)(c) shall apply to the initial indebtedness and all subsequent advances on an individual basis, only where evidence of individual insurability has not been required.

(e) The effective date of coverage for each part of the insurance attributable to a subsequent advance or increase to the outstanding balance is the date on which the advance or increase is posted to the plan account.

Notes

Utah Admin. Code R590-91-7

Adopted by Utah State Bulletin Number 2022-07, effective 3/25/2022