Hawaii Administrative Rules
Title 16 - DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
Chapter 6 - CREDIT LIFE AND CREDIT DISABILITY INSURANCE
Subchapter 3 - PREMIUMS, RATE DEVIATIONS, REFUNDS, AND COLLECTION AND REMITTANCE OF PREMIUMS
Section 16-6-12 - Credit disability insurance premium rates
Current through November, 2024
(a) If premiums are paid in one sum for the entire duration of the indebtedness, the rates for $100 of initial insured indebtedness repayable in equal installments as shown in the exhibit entitled "Credit Disability Insurance Premium Rates," dated July 1, 1988, located at the end of this chapter and which is made a part of this section, shall be deemed reasonable in relation to the benefits provided. Premium rates for all indebtedness repayable in installments shall be consistent with the rates in the exhibit entitled "Credit Disability Insurance Premium Rates," dated July 1, 1988, located at the end of this chapter.
(b) If premiums are paid on the basis of a premium per month per $1,000 of outstanding indebtedness, these premiums shall be computed according to the following formula:
where SPn = Single premium rate per $100 of initial insured indebtedness repayable in n equal monthly installments.
Opn = Monthly outstanding balance premium rate per $1,000.
n = Original repayment period in months.
(c) The actuarial equivalent of sections 16-6-11 and 16-6-12 if the coverage provided is a constant maximum indemnity for a given period of time.
(d) An appropriate combination of the premium rate for a constant maximum indemnity for a given period of time and the premium rate for a maximum indemnity which decreases in even amounts per month, if the coverage period is a combination of a constant maximum indemnity for a given period of time after which the maximum indemnity begins to decrease in even amounts per month.
(e) The actuarial equivalent of the rates in subsections (a), (b), (c) and (d) if the benefits provided are other than those described in these four subsections.
(f) The outstanding balance rate for credit disability insurance, unlike credit life insurance, varies by term (months). Because of this, it is difficult or impossible to compute a single maximum outstanding balance rate applicable to all loans made under an open-end or revolving credit plan. If the term of the loan is clearly defined, an appropriate rate or rates can be computed. However, this is not the case in most revolving credit situations.
(g) The premium rates specified in the table at the end of this chapter are considered reasonable for policies which:
(h) If any insurer files for approval any forms providing coverage more restrictive than that described in subsection (g) the insurer shall demonstrate to the satisfaction of the insurance commissioner that the premium rates to be charged for such restricted coverage will produce a loss ratio not less than the contemplated for standard coverage at the premium rates described in subsections (a), (b), (c), (d), (e) and (f).