Current through Register Vol. 56, No. 6, March
18, 2024
(a) The fact
that standards are set forth in this section does not indicate that premium
charges in excess of those standards will furnish cause for disapproval of
policy forms, as described in
N.J.A.C.
11:2-3.1 6.
(b) The standards set forth in this section
are derived from studies made by the Department, and are provided to serve as a
guide to insurers in preparing filings for credit life insurance and credit
accident and health insurance on the term plan.
(c) The benefits to be provided in connection
with forms filed with the Commissioner in accordance with
N.J.A.C.
11:2-3.1 4 shall be deemed prima facie
reasonable in relation to the premium charge if the schedule of rates filed
with such forms does not exceed the standards set forth in this
section.
(d) This section shall not
preclude an insurer from filing rates which exceed the standards set forth if
the filing conforms to the requirements of
N.J.S.A.
17B:29-7 and 8.
(e) In determining whether any filing shall
be disapproved, the Commissioner will give consideration to available mortality
and morbidity data pertaining to the class or classes of debtors to be insured;
previous experience, if any, on the debtors of a particular creditor, including
the experience of any subsidiary or affiliate of such creditor; available age
data and a reasonable rate of expense.
(f) Standards for premium rates for credit
life insurance shall be as follows:
1. If
premiums are paid monthly on outstanding balances, the monthly premium rate per
$ 1,000 of insurance in force is $ 0.62.
2. If premiums are paid in one sum for the
entire duration of the indebtedness:
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3. For the purpose of computing the average
amount of insurance in force on all debtors of a creditor in (f)1 and 2 above,
there shall be included the insurance in force on all debtors of any subsidiary
or affiliate of the creditor whether provided by one or more insurers, unless
the Commissioner determines that it is inequitable to do so.
4. As an alternative to the standards set
forth in (f)1 and 2 above, an insurer may, where age data applicable to the
insured persons are available, determine premium rates based on such age data
and computed in a manner consistent with (f)1 and 2 above.
5. Standards for premium rates for
indebtedness repayable in installments other than as indicated in this
subsection shall be the equivalent of the standards set forth in (f)1 and 2
above.
6. The standards for premium
rates set forth in (f)1 and 2 above are applicable to the type of credit life
insurance contract customarily offered for sale. Standards for premium rates in
the case of forms which vary in any material respect from this standard type of
credit life insurance contract shall reflect such variations to the extent that
there is a measurable difference in the cost of the coverage
provided.
(g) Standards
for premium rates for credit accident and health insurance shall be as follows:
1. If premiums are paid in one sum for the
entire duration of the indebtedness, the following rates per $ 100.00 of
initial indebtedness repayable in indicated number of equal monthly
installments:
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2. The premium rates set forth in (g)1 above
are for contracts providing benefits commensurate with the amount of insured
indebtedness payable after the 14th day of disability retroactive to the first
day of disability, and shall be applicable as follows:
i. Column 1 shall be applicable for such
contracts which contain a provision excluding or denying claim for disability
resulting from preexisting condition for which the debtor received medical
diagnosis or treatment within six months before the effective date of coverage.
There shall be no other provision in the contract which excludes or restricts
liability in the event of disability caused in a certain specified manner,
except as further provided in this paragraph.
ii. Column II shall be applicable for such
contracts which contain a provision that no claim for disability shall be
reduced or denied on the ground that an illness, disease or physical condition
of a debtor, not excluded from coverage at the time the debtor's insurance
becomes effective by name or specific description in an amendment or rider
signed by the debtor, had existed prior to the effective date of the debtor's
coverage, but contain no other provision which excludes or restricts liability
in the event of disability caused in a certain specified manner, except as
further provided in this paragraph.
iii. Any contract to which either Column I or
Column II rates apply may, however, contain provisions excluding or restricting
coverage in the event of pregnancy, intentionally self-inflicted injuries,
foreign travel or residence, travel or flight in nonscheduled aircraft, war or
military service.
3.
Standards for premium rates for indebtedness repayable in installments other
than as indicated in (g)1 above shall be consistent with the above
standards.
4. If premium rates are
payable other than in one sum, an insurer may determine such rates on a basis
consistent with the above rates, taking into consideration interest and
mortality.
5. The standards for
premium rates set forth in (g)1 and 2 above are applicable to the two forms of
credit accident and health insurance described which are illustrative of the
kinds of coverage that may be issued. Nothing in this subsection, however,
shall preclude an insurer from filing other forms of credit accident and health
insurance for the consideration of the Commissioner. Standards for premium
rates for contracts providing benefits on a basis different from those
described in this subsection shall be consistent with the standards set forth
in this subsection.
6. Single
premium rates with respect to seven-day, retroactive only, and 14-day and
30-day retroactive and non-retroactive credit accident and health insurance are
set forth in the Appendix to this subchapter.
(h) Standards for premium rates for contracts
combining credit life and credit accident and health coverage in one policy
shall be consistent with the standards set forth in (f) and (g)
above.
(i) When individual and
group coverages permitted by
N.J.A.C.
11:2-3.3 are offered in combination with
credit involuntary unemployment insurance, credit personal property insurance,
or both, under separate and distinct policies, the total combined premium
amount or rate to be charged to the debtor shall be reduced by five percent or
by a greater percentage at the discretion of the insurer.
(j) Commencing with the policy anniversary
date of a group policy which occurs on or after the effective date of this
subchapter, the insurer shall use certificates of group insurance and notices
of proposed insurance as required by this subchapter with a premium rate for
the coverage provided which does not exceed the applicable schedules filed with
the Commissioner.
(k) An insurer
may from time to time revise its schedule of premium rates for policies of
credit life insurance and credit accident and health insurance and shall file
such revised schedules with the Commissioner.
