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 16-6-13 - Refunds
Universal Citation: HI Admin Rules 16-6-13
Current through August, 2024
(a) Section 431:10B-109, HRS, requires that the formula to be used in computing refunds be filed with and approved by the insurance commissioner.
(1) Schedules used to compute the refund in
connection with single premium declining balance term credit life insurance and
single premium credit disability insurance must provide for a refund at least
equal to that which would be provided by application of the so-called "Rule of
78" (also called the "sum of the digits" method).
(2) Schedules used to compute the refund in
connection with single premium level term credit life insurance must provide
for a refund at least equal to the amount which would be provided by the "pro
rata" method.
(3) An appropriate
combination of the pro rata method for level term and the Rule of 78 method for
declining balance term if the coverage provided is a combination of level term
and declining balance term.
(b) At the option of the insurer but consistent with subsection (a) either:
(1) No
charge for credit insurance be made for the first fifteen days of a month and
full month be charged for sixteen days or more of a month; or
(2) A refund be made on a pro rata basis for
each day within the month.
(c) A refund or credit need not be made where the amount thereof is less than one dollar.
(d) The requirements for filing refund formulas shall be considered met if they are set forth in the individual policy or group certificate filed with and approved by the insurance commissioner.
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