Section R20-6-604.05. Credit Disability Insurance Rates and Provi- sions

A.      Under the process prescribed in R20-6-604.03, the Director shall issue an order establishing prima facie rates for credit disability 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 disability insurance policy shall meet the require- ments listed in this Section. The policy shall:

1.        Provide coverage for disability, by whatever means caused, to all eligible debtors, with or without evidence of individual insurability for debtors that purchase coverage within 30 days of becoming eligible;

2.        Include a definition of disability that is no more restric- tive than the following:

a.         For the first 12 months of disability, the inability of the insured to perform the essential functions of the insured’s occupation; and

b.        After the first 12 months of disability, the inability of the insured to perform the essential functions of any occupation for which the insured is reasonably suited by virtue of education, training, or experi- ence;

3.        Not include any employment requirement that a debtor be employed more than full-time on the effective date of coverage, with a definition of “full-time” as a regular work week of at least 30 hours;

4.        Have no exclusions other than for disabilities resulting from:

a.         Normal pregnancy,

b.        Intentionally self-inflicted injury, or

c.         A preexisting condition;

5.        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;

6.        Have no age restrictions, except the following permissi- ble exclusion:

An age restriction providing that no insurance will become effective on a debtor on or after the attainment of age 65 and that all insurance shall terminate on a debtor attaining age 66; and

7.        Include a provision for a daily benefit of not less than one-thirtieth of the monthly benefit payable under the policy.

Historical Note

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