Utah Admin. Code R590-91-8 - Credit Accident and Health Insurance Prima Facie Rates

(1) Subsections (3) and (4) refer to credit accident and health insurance prima facie 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.

(2) Subsections (5), (7), (8), and (9) 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 single-premium basis for the duration of the coverage, the premium shall be as indicated on "R590-91 Attachment: Credit Disability Insurance" available on the department's website https://insurance.utah.gov.

(4) If a premium is paid on a premium rate per month per thousand of outstanding insured indebtedness, the premium shall be computed according to:

(a) the formula in Subsection (4)(c); or

(b) a formula approved by the commissioner that produces a rate actuarially equivalent to the single premium rate defined in Subsection (3).

(c) OPn=(20/(n+1))(SPn):

(i) SPn = single premium rate per $100 of initial insured indebtedness repayable in n equal monthly installments;

(ii) OPn = monthly outstanding balance premium rate per $1,000; and

(iii) n = original payment period in months.

(5) The actuarial equivalent of Subsections (3) and (4) shall be used if the coverage provided is a constant maximum indemnity for a given time period.

(6) An appropriate combination of the premium rate for a constant maximum indemnity for a given time period and the premium rate for a maximum indemnity that decreases in equal amounts per month shall be used if the coverage provided is a combination of a constant maximum indemnity for a given time period after which the maximum indemnity begins to decrease in equal amounts per month.

(7) If the benefit provided is different from the benefits described in Subsections (1) through (6), the benefit rate shall be actuarially consistent with the rates in Subsections (3), (4), (5), and (6).

(8) The outstanding balance rate for credit accident and health insurance may be a term specified rate or a single composite term outstanding balance rate applicable to any loan made under an open-end credit plan.

(9)

(a)

(i) For an open-end credit plan, the monthly rate per $1,000 of outstanding principal balance shall be the rate calculated using the formula in Subsection (4) where n is the number of monthly indemnity payments required to completely extinguish the debt.

(ii) The rate shall be further reduced to appropriately account for the critical period, if applicable.

(b) The critical period factors shall be filed with the department and shall not exceed the factors based on the 1968 Credit A and H Two Composite Tables published by the NAIC (Proceedings - 1968 Vol. II).

(10) The premium rates in Subsections (1) through (9) shall apply to each credit accident and health insurance policy that is issued with or without evidence of insurability, that is offered to all eligible debtors, and that contains:

(a) no provision excluding or denying a disability claim resulting from a preexisting condition, except for a condition that:

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

(ii) caused the insured debtor's loss within the six months after the effective date of coverage;

(b) no other provision that excludes or restricts liability for a disability caused in a specified manner, except for a provision that excludes or restricts coverage in the event of:

(i) normal pregnancy; and

(ii) an intentionally self-inflicted injury;

(c) no actively at work test that requires the debtor to be employed more than 30 hours per week;

(d) no age restriction or an age restriction only making ineligible for coverage:

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

(ii) a debtor who will have reached age 66 or over on the maturity date of the indebtedness;

(e) a daily benefit equal to 1/30th of the monthly benefit payable under the policy for the indebtedness; and

(f) a definition of disability that is no more restrictive than a definition requiring that:

(i) the insured be unable to perform the principal duties of the insured's occupation for 12 months from the time the insured's disability occurred; and

(ii) the insured be unable to perform the principal duties of any occupation the insured is reasonably qualified for by education, training, or experience after 12 months from the time the insured's disability occurred.

(11) Subsection (10)(f) may not apply to lump sum disability coverage.

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

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

(b) stop insurance coverage or reduce the amount of insurance when the debtor reaches age 65.

Notes

Utah Admin. Code R590-91-8

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