New Hampshire Code of Administrative Rules
Ins - Commissioner, Insurance Department
Chapter Ins 1200 - CREDIT INSURANCE
Part Ins 1201 - CREDIT LIFE AND CREDIT ACCIDENT AND HEALTH INSURANCE
Section Ins 1201.01 - Purpose

(a) The purpose of this part is to protect the interests of debtors and the public in this state by providing a system of rate, policy form, and operating standards for the transaction of credit life and credit accident and health insurance.

(b) Creditors of various types participate in the marketing of credit insurance. Where this is the case, credit insurance is an incidental part of the credit transaction. The debtor constitutes a captive prospect for insurance and is frequently ill-equipped and poorly situated to judge whether the insurance offered by the creditor is reasonably priced. If the charge for the insurance is passed on to the debtor, as is usually the case, it would be to the advantage of creditors for them to seek to have the insurer charge premium rates in excess of those which would prevail were creditors charged with a fiduciary responsibility to seek out low cost credit insurance for their customers. This is because such creditors are able to recoup substantially all of the excess through administrative allowances, dividends, experience refunds, and other arrangements. Further, the larger the premium, the greater the finance charge added to it. In such a market climate, the need for premium rate regulation in credit insurance is apparent. In addition, the inferior position of the debtor requires that all other aspects of credit insurance be closely supervised.

(c) Credit insurance premium rate standards set forth in this part are designed to assure debtors that such insurance will be freely available at reasonable cost, to maintain a relationship between benefits and premiums consistent with other kinds of insurance sold in this state, and to provide reasonable compensation to the creditor.