Section R20-6-604.04. Credit Life Insurance Rates and Provisions

A.      Under the process prescribed in R20-6-604.03, the Director shall issue an order establishing prima facie rates for credit life insurance.

B.       The Department shall presume that an insurer meets the loss ratios prescribed in R20-6-604.02(B) if the insurer uses the prima facie rates, subject to the requirements in this Section and R20-6-604.08. An insurer may use the prima facie rates without filing additional actuarial support.

C.      A credit life insurance policy shall meet the requirements listed in this Section. The policy shall:

1.        Provide coverage for death, by whatever means caused, to all eligible debtors, with or without evidence of indi- vidual insurability for debtors that purchase coverage within 30 days of being eligible;

2.        Have no exclusions other than for:

a.         Suicide within six months after the effective date of coverage, or

b.        A preexisting condition;

3.        Have no age restrictions, except the following permissi- ble exclusions:

a.         An age restriction providing that no insurance will become effective on a debtor on or after the attain- ment of age 70 and that all insurance shall terminate on a debtor attaining age 70; and

b.        An age restriction for a revolving credit life insur- ance policy that:

i.         Excludes a class of debtors determined by age, or

ii.        Provides for termination of insurance or reduc- tion in the amount of insurance when a debtor reaches age 70; and

4.        For insurance on revolving accounts, have the date on which an advance or charge occurs as the effective date of coverage for each part of the insurance attributable to a different advance or a charge to the plan account. Any exclusion period or preexisting condition limitation shall run separately for each advance or charge.

Historical Note

New Section made by final rulemaking at 8 A.A.R. 2725, effective June 7, 2002 (Supp. 02-2).