California Code of Regulations
Title 10 - Investment
Chapter 5 - Insurance Commissioner
Subchapter 2 - Policy Forms and Other Documents
Article 6.8 - Credit Life and Credit Disability Insurance: Premium Rates
Section 2248.34 - Prima Facie Premium Computation for Life Coverages
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) Prima facie premiums for Closed End life coverages ("Scheduled Decreasing Life", "Class A Decreasing Life" and "Level Life") are computed as follows:
Where: n = number of months of coverage
t varies from 1 to n
(This formula calculates the present value of monthly premiums for each month of the term of the loan. The present values are then accumulated to determine the single premium.)
|
Monthly Premium = MP X |
Inst |
|
1000 |
|
Where: |
MP is the Closed End Monthly Premium per $1000 of scheduled outstanding balance of the indebtedness from TABLE 1 in § 2248.47. |
|
Inst is the lesser of the scheduled principal balance of the debt outstanding for month "t" (not including delinquencies or unearned finance charges) or the amount of insurance for month t (for partial coverage). |
(b) Prima facie monthly premiums for Open End life coverages ("Credit Union Open End", "Line of Credit" and "Credit Card") are computed as follows:
|
Monthly Premium = MP X |
Inst |
|
1000 |
|
Where: |
MP is the Open End Monthly Premium per $1000 of scheduled outstanding balance of the indebtedness from TABLE 1 in § 2248.47. |
|
Inst the scheduled principal balance of the debt outstanding for month "t" (not including delinquencies or unearned finance charges) or the amount of insurance for month t provided for in the policy or certificate, if less. |
The balance to which the rate is applied may be computed on the same basis as that used to compute interest charges on the debt.
(c) Rates for "Joint Life" coverages are computed by applying the Joint Life Multiplier In TABLE 1 to the appropriate Monthly premium.
1. New section
filed 4-14-94; operative 5-16-94. Submitted to OAL for printing only pursuant to
Government Code section
11343(a)(1)
(Register 94, No. 15).
2. Amendment of NOTE filed 10-2-2001; operative
10-1-2001. Submitted to OAL for printing only pursuant to Government Code section
11340.9(g)
(Register 2001, No. 40).
Note: Authority cited: Sections 779.21 and 779.36, Insurance Code. Reference: Sections 779.4, 779.9, 779.13, 779.16 and 779.36, Insurance Code; Sections 18191, 18290- 18292, 22458.1, 22458.2 and 24458.1, Financial Code; and Credit Insurance General Agents Association v. Payne, (1976) 16 Cal.3d 651.
