Compilation of Rules and Regulations of the State of Georgia
Department 120 - OFFICE OF COMMISSIONER OF INSURANCE, SAFETY FIRE COMMISSIONER AND INDUSTRIAL LOAN COMMISSIONER
Chapter 120-2 - RULES OF COMMISSIONER OF INSURANCE
Subject 120-2-27 - CREDIT LIFE AND CREDIT ACCIDENT AND SICKNESS INSURANCE FORMS
Rule 120-2-27-.03 - Credit Life Insurance Rates

Universal Citation: GA Rules and Regs r 120-2-27-.03

Current through Rules and Regulations filed through September 23, 2024

The following standards shall be observed and followed in the use of Credit Life Insurance Forms in this state:

(a) All credit life insurance forms used in this state shall contain schedules of premium rates to be charged in connection therewith which:

1. are reasonable in relation to the benefits and coverage provided; and

2. are neither excessive nor inadequate, nor shall they be unfairly discriminatory.

(b) No credit life insurance form shall be used in this state which contains a schedule of premiums in excess of the applicable premium rates contained in the following subparagraphs 1., 2., and 3., and approval of all credit life insurance forms heretofore given is hereby withdrawn:

1. For decreasing term credit life insurance, where the insured indebtedness is repayable in substantially equal installments during the term of the coverage, and the premium rate is based on initial insured indebtedness, a single premium of $.45 per annum, per $100.00 of initial insured indebtedness. For premiums not based on initial insured indebtedness, a monthly premium rate of $.70 per $1,000.00 of outstanding insured loan balance.

2. For net decreasing term credit life insurance, where the premium is not based on the initial insured indebtedness, the rate charged shall not exceed $.70 per month per $1,000, and the single premium shall not exceed the premium as calculated using the formula illustrated in Exhibit A of this Regulation.

3. For level term credit life insurance, a single premium rate of $.84 per annum, per $100.00 of initial insured indebtedness.

4. Single premiums for credit life insurance covering joint lives on either of the bases in subparagraph 1., 2., or 3. of this rule shall not exceed 150 percent of the appropriate single life rate specified in subparagraph 1., 2., or 3. of this rule.

(c) Any agency agreement or agency contract for the payment of any commissions, service fees, or other forms of compensation of any kind, directly or indirectly, to any agent or broker for the writing of credit life insurance in this state may not provide for all such payments in the aggregate to exceed twenty-five percent (25%) of the net written premium. For the purpose of this Rule, the term "net written premium" shall mean gross written premium minus refunds due to terminations of coverage.

(d) Any agency agreement in effect prior to the effective date of this regulation, providing for the additional payment of commissions above the 25% soliciting commissions for credit life policies written or credit life certificates issued prior to the effective date of this regulation, shall remain in effect for coverage commencing prior to March 1, 1993.

(e) The term "initial insured indebtedness" shall mean the total payments as that term is defined under the Federal Consumer Credit Protection Act. This Act defines the 'total of payments' as the amount you will have paid when you have made all scheduled payments.

O.C.G.A. Secs. 33-2-9, 33-7-6, 33-27-1, 33-31-8, 33-31-12.

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