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 2248.35 - Prima Facie Premium Computation for Disability Coverages
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) Single and monthly premiums for single disability coverage of Closed End loans, where coverage extends for a period measured from the inception of coverage, are computed as follows:
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SP (for the term of coverage) x (Total of covered disability benefit payments) |
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Single Premium |
= |
__________________________________________________________ |
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$1000 |
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MP (for the initial term of coverage) x (Scheduled total of covered disability benefit payments remaining on Month "t") |
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Monthly Premium for Month "t" |
= |
__________________________________________________________ |
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$1000 |
Where SP and MP are taken from the lettered Subtable, corresponding to the Class of Business, of TABLE 2 in § 2248.47.
(b) Prima facie monthly premiums for single Open End disability coverages ("Credit Union Open End", "Line of Credit" and "Credit Card") are computed as follows:
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Monthly Premium = MP X |
Inst |
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$1000 |
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Where: |
MP is the Open End Monthly Premium per $1000 of outstanding principal balance (not including unearned finance charges) from TABLE 3 in § 2248.47. |
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Ins t is the outstanding principal balance of the debt outstanding for month "t" (not including unearned finance charges) or the amount 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) Prima facie premium rates for "Critical Period Disability" coverage, as provided for in Article 6.7, shall be actuarially equivalent to the prima facie disability rates for the corresponding coverage under subsections (a) and (b) and shall be approved by the Commissioner pursuant to § 2248.43.
(d) Prima facie rates for "Joint Disability" coverages are computed by multiplying the appropriate single disability rates by 1.6.
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 subsection (b) filed 1-9-2002;
operative 1-9-2002. Submitted to OAL for printing only pursuant to Government Code
section
11340.9(g)
(Register 2002,, No. 2).
Note: Authority cited: Sections 779.21 and 779.36, Insurance Code. Reference: Sections 779.9, 779.13, 779.16 and 779.36, Insurance Code; Sections 18191, 18290 - 18292, 22458.1, 22458.2, 24458.1 and 24458.2, Financial Code; and Credit Insurance General Agents Association v. Payne, (1976) 16 Cal.3d 651.
