New Mexico Administrative Code
Title 13 - INSURANCE
Chapter 18 - CREDIT INSURANCE
Part 2 - CREDIT LIFE AND CREDIT HEALTH INSURANCE
Section 13.18.2.27 - STANDARD OF BENEFITS FOR CREDIT ACCIDENT AND HEALTH INSURANCE

Universal Citation: 13 NM Admin Code 13.18.2.27

Current through Register Vol. 35, No. 6, March 26, 2024

The standards and principles for the application of the rates set forth for credit accident and health insurance are as follows.

A. The initial amount of insured indebtedness to which the rate is applied shall not exceed the aggregate of the insured portion of the periodic scheduled unpaid installments of the indebtedness.

B. Except for open-end accounts, the indebtedness must be payable in substantially equal monthly or other periodic installments during the period of coverage.

C. The credit accident and health insurance contract may require written and signed evidence of insurability and, where offered, shall be offered to all eligible debtors and shall contain:

(1) no provision for validity of insurance more restrictive than contestability based on material misrepresentation; an insurer may not rely on material misrepresentation as a defense against the payment of a claim unless the insurer required the insured to sign a written statement in which the alleged misrepresentation was made;

(2) no provision which excludes or restricts liability in the event of disability caused in a specific manner or under specific condition, except that it may contain provisions excluding or restricting coverage in the event of:
(a) elective abortion;

(b) normal pregnancy, except complications of pregnancy;

(c) intentionally self-inflicted injuries;

(d) flight in nonscheduled aircraft;

(e) loss resulting from war or military service;

(3) provision for a daily benefit equal in amount to one-thirtieth (or other applicable fraction) of the scheduled monthly (or other specified mode of installment) payment or indebtedness;

(4) for the purpose of total disability insurance, a definition of total disability which provides coverage during the first 12 months of such disability even though the insured is able to perform an occupation other than the one he held at the time such disability occurred; during the first 12 months of each disability, the definition of total disability must relate such disability to the occupation of the debtor at the time the disability commenced; after disability continues for more than 12 months, the definition of total disability may relate such continuing disability to the inability to perform any occupation for which the debtor is reasonably fitted by education, training or experience.

D. The credit accident and health insurance must be offered to all debtors regardless of age, or to all debtors not older than the applicable age limit. The applicable age limit shall not be less than the attained age of 66 years if such limit applies to the age when the insurance is issued, or not less than attained age 67 if such limit applies to the age on the scheduled maturity date of the debt. Coverage issued in connection with open-end transactions may contain a provision for the automatic termination of coverage upon the attainment of a specified age, which shall not be less than 67. The use of any other age limits will require that premiums be filed under the deviation procedures in this rule.

E. There shall be no provisions excluding or denying a claim for disability under credit accident and health insurance resulting from pre-existing conditions except for those conditions for which the insured debtor received medical diagnosis or treatment within six months immediately preceding the effective date of the debtor's coverage and which caused a period of loss within six months following the effective date of coverage; provided, however, that any subsequent period of disability resulting from such condition that commences or recommences more than six months after the effective date of the coverage shall be covered under the provisions of the policy. The effective date for each part of the insurance attributable to a different advance or charge to the account is the date on which the advance or charge is posted to the account of the debtor.

Disclaimer: These regulations may not be the most recent version. New Mexico may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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