Current through Register Vol. 63, No. 12, December 1, 2024
(1) Unless data submitted to the Director
under OAR 836-060-0043 justify a higher
rate in the Director's opinion, credit life insurance premium rates for the
insured portion of an indebtedness repayable in equal monthly installments,
when the insured portion of the indebtedness decreases uniformly by the amount
of the monthly installment paid, shall not exceed the rates ("prima facie"
rates) set forth in subsections (a) and (b) of this section. Subsections (c),
(d) and (e) of this section prescribe the corresponding "prima facie" premium
rates for other types of credit life insurance benefits. The prima facie
premium rates are as follows:
(a) $.65 per
month per $1,000 of outstanding insured indebtedness, if premiums are payable
on a monthly outstanding balance basis ($.59 if underwritten);
(b) If premiums are payable on a single
premium basis and the amount of the insurance decreases in equal monthly
amounts, the prima facie rates per $100 of initial insured indebtedness shall
equal:
(A) $.42 per year on credit terms of 63
months or less ($.38 if underwritten); and
(B) On credit terms over 63 months
(n+1)
20
times $.65 ($.59 if underwritten), where n is the credit term
in months. The rates so calculated are to be immediately rounded to two-decimal
precision, i.e. to the nearest cent.
(c) If premiums are payable on a single
premium basis and the benefit provided is level term, the prima facie rate is
$.76 per $100 ($.68 if underwritten) of insured indebtedness per year of term.
The rate for a fractional part of a year shall be calculated pro rata and
immediately rounded to two-decimal precision, i.e. to the nearest
cent.
(d) The joint coverage rate
shall be 165% of the rounded rate for single person coverage;
(e) If coverage is a combination of level
term and decreasing term with equal decrements, the rate shall be a combination
of the appropriate rate for level term and the appropriate rate for decreasing
term with equal decrements;
(f) For
coverage for outstanding indebtedness when only the principal is insured and
the interest is paid on a scheduled basis to provide equal monthly repayments
of indebtedness (simple interest loans), the premium shall be actuarially
consistent with other premiums calculations described in this rule;
(g) For other benefits, except for benefits
described in subsection (2)(e), of this rule, rates shall be actuarially
consistent with the rates specified in this section.
(2) The premium rates in section (1) of this
rule apply to credit life insurance policies that are issued without
underwriting or with underwriting for high risk conditions that have the
potential of becoming terminal during the period of coverage, and that are
offered to all debtors. Such policies:
(a)
Shall not contain exclusions other than suicide within six months following the
effective date of coverage for the insured person. If a suicide exclusion is
used, the exclusion shall not be effective for more than six months following
the effective date of coverage for the insured person. With respect to an
exclusion under this subsection:
(A) Except as
provided in paragraph (B) of this subsection, the effective date of insurance
coverage applicable to an indebtedness is the date on which the individual
policy or certificate of coverage was first issued; and
(B) An individual policy for an open-end plan
or a certificate of coverage under a group policy for an open-end plan may
provide that the effective date of coverage of a specific advance or charge,
for the amount in excess of the first $3,000 of account balance, is the date of
the specific advance or charge;
(b) Shall not contain age restriction other
than age restrictions making ineligible for coverage debtors 66 or over at the
time the indebtedness is incurred and may provide that all insurance will
terminate upon attainment by the debtor of a specified age not less than 66
years;
(c) Shall not contain a
provision excluding or denying a claim for death resulting from a preexisting
condition except for those conditions for which the insured debtor received
medical diagnosis or treatment within six months preceding the effective date
of coverage and which directly contributed to the death of the insured debtor
within six months following the effective date of coverage. For purposes of
this subsection:
(A) Except as provided in
paragraph (B) of this subsection, the effective date of insurance coverage
applicable to an indebtedness is the date on which the individual policy or
certificate of coverage was first issued; and
(B) An individual policy for an open-end plan
or a certificate of coverage under a group policy for an open-end plan may
provide that the effective date of coverage of a specific advance or charge,
for the amount in excess of the first $3,000 of account balance, is the date of
the specific advance or charge; and
(d) May contain additional benefits to
policyholders and their debtors, such as dismemberment, partial disability and
other benefits of small economic value to the consumer, but an insurer shall
not pass on the charge for such coverage to the debtor so as to increase the
total rate to exceed the rate established by this rule.
Stat. Auth.: ORS
731.244
Stats. Implemented: ORS
742.003 & ORS
742.005
