New Mexico Administrative Code
Title 13 - INSURANCE
Chapter 18 - CREDIT INSURANCE
Part 2 - CREDIT LIFE AND CREDIT HEALTH INSURANCE
Section 13.18.2.33 - FORM CI-DRF: PART C - DETERMINATION OF DEVIATED PRESUMPTIVE CASE RATE
Universal Citation: 13 NM Admin Code 13.18.2.33
Current through Register Vol. 35, No. 6, March 26, 2024
A. Single account cases: If the account is 100 percent credible or if it is within the definition of single account case as filed by the insurer, the deviated presumptive case rate for the account will be determined by the appropriate formula set forth in Subsection C of 13.18.2.33 NMAC below.
B. Multiple account cases: If the account is in a multiple account case, the deviated presumptive case rate for the account will be the case rate for that multiple account case determined by the appropriate formula set forth in Subsection C of 13.18.2.33 NMAC below.
C. Calculation of deviated presumptive case rates.
(1)
Symbols and definitions:
(a) NCR = new case
rate;
(b) PFR = presumptive
rate;
(c) ALR = actual loss ratio
for case at presumptive rate basis;
(d) ELR = expected loss ratio at presumptive
rate basis;
(e) Z = credibility
factor for case;
(f) CLR =
credibility adjusted case loss ratio at presumptive basis = Z(ALR) =
(1-Z)(ELR).
(2) New case
rate: credit life insurance:
(a) if CLR is
greater than ELR, NCR = PFR [1 + 1.1. (CLR - ELR)];
(b) if CLR is less than ELR, NCR = PFR [1 -
(ELR - CLR)].
(3) New
case rate: credit disability insurance:
(a) if
CLR is greater than ELR, NCR = PFR [1 + 1.2 (CLR ELR)];
(b) if CLR is less than ELR, NCR = PFR [1 -
(ELR - CLR)].
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