New Jersey Administrative Code
Title 11 - INSURANCE
Chapter 2 - INSURANCE GROUP
Subchapter 3 - CREDIT LIFE INSURANCE AND CREDIT ACCIDENT AND HEALTH INSURANCE
Section 11:2-3.10 - Balloon coverage
Universal Citation: NJ Admin Code 11:2-3.10
Current through Register Vol. 56, No. 6, March 18, 2024
(a) Credit life and credit accident and health insurance coverage on balloon loans, that is, loans in which the periodic payments are insufficient to pay the loan so that the last payment is a balloon or large amount, shall be net coverage for credit life insurance. For credit accident and health insurance, gross coverage is acceptable but the monthly disability benefit, including the final installment of the balloon payment, shall not be less than the previous regular monthly installments.
(b) Single premium charges for credit life insurance providing balloon coverage shall be calculated as follows:
1. For each month of
coverage, a charge for that month based on the amount of coverage and the
monthly outstanding balance prima facie rate shall be determined.
2. The charges shall be discounted at a
nominal rate no less than five percent. The Commissioner shall review this
discount rate on a triennial basis and provide public notice of any adjustments
to this discount rate by publication in the New Jersey Register. Any such
adjustment shall be based on the average of the rates being paid at that time
on three-year United States Treasury Notes as reported in the Wall Street
Journal on the last day of sale in the most recent three calendar
years.
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