Current through Register Vol. 63, No. 9, September 1, 2024
(1) An
insurer shall file for approval by the Director its refund formulas prior to
their use. The following methods are considered appropriate for the plans
described:
(a) Pro Rata Method. The pro rata
unearned gross premium method shall be used for level term credit life
insurance or credit health insurance where under the insured is covered for a
constant maximum indemnity for a given period of time, after which the maximum
indemnity begins to decrease in even amounts per month, and credit insurance
coverage under which premiums are collected from the debtor on a basis other
than the single premium basis;
(b)
Actuarial method commonly referred to as the Rule of Anticipation. A refund of
unearned premium used for decreasing term credit life insurance may be made as
provided in this subsection. The amount of the refund shall be not less than
the total premium, less the greater of:
(A)
Ten percent of the premiums or $75, whichever is less; or
(B) The premium earned to the installment due
date of the loan nearest the date of prepayment, for the periods of time the
loan balances were actually outstanding. For purposes of refund computations
under this paragraph, the installment due date of the loan preceding the date
of prepayment shall be considered to be nearest if prepayment occurs 15 days or
less after that installment date. If prepayment occurs more than 15 days after
the preceding installment due date, the next succeeding installment due date
shall be considered to be nearest to the date of prepayment.
(c) Any method that develops
refunds that are at least as favorable to the debtor as refunds based on the
actuarial method described in subsection (b) of this section.
(2) In the event of termination,
no charge for credit insurance may be made for the first 15 days of a loan
month, and a full month may be charged for 16 days or more of a loan
month.
(3) The refund formula shall
be set forth in the individual policy or group certificate.
(4) The requirement of ORS
743.378 that refund formulas be
filed with the Director is fulfilled by inclusion of the refund formulas in the
individual policy or group certificate filed with the Director.
(5) No refund of $5 or less need be
made.
Stat. Auth.: ORS
731.244
Stats. Implemented: ORS
743.378
