Current through Register Vol. XLI, No. 38, September 20, 2024
6.1.
6.1.a. Credit life insurance. -- Prima facie
reasonable rates. -- W. Va. Code §
33-6-9(e)
provides that the Commissioner shall disapprove any form of policy, application,
rider or endorsement or withdraw any previous approval if the benefits provided
therein are unreasonable in relation to the premium charged. A single premium rate
of sixty-five cents ($.65) per annum per one hundred dollars ($100) of decreasing
term life insurance discounted at three percent (3%) per annum for interest and
mortality after the first twelve (12) months (or its actuarial equivalent if other
than single premium) is prima facie reasonable and any rate in this amount or less
will be approved without statistical justification. A premium payable monthly at a
rate of one dollar ($1.00) per one thousand dollars ($1,000) of outstanding unpaid
insured indebtedness or a single premium of one dollar and twenty cents ($1.20) per
annum per one hundred dollars ($100) of level term credit life insurance, is the
actuarial equivalent of the sixty-five cent ($.65) rate.
6.1.b. A single premium rate of one dollar ($1.00)
per annum per one hundred dollars ($100) of decreasing term joint life insurance
discounted at three percent (3%) per annum for interest and mortality after the
first twelve (12) months (or its actuarial equivalent if other than single premium)
is prima facie reasonable and any rate in this amount or less will be approved
without statistical justification.
6.1.c. For dismemberment benefit, the premium rate
shall be not more than five cents ($.05) per one hundred dollars ($100) per
annum.
6.2. Credit life
insurance -- Exceptions, exclusions and limitations on coverage. -- The rates
referred to in Section 6.1 of this rule, are presumed reasonable only if the
policies contain no exceptions, limitations or exclusions other than for suicide and
contain no age restrictions, or only age restrictions making ineligible for the
coverage, debtors sixty-five (65) or older at the time the indebtedness is incurred,
or debtors who will have attained age sixty-six (66) or over on the maturity date of
the indebtedness.
6.3.
6.3.a. Accident and sickness insurance -- Prima
facie reasonable rates. -- For credit accident and sickness insurance the following
single premium rates per one hundred dollars ($100) of initial insured indebtedness
are prima facie reasonable: (See Table 114.6A found at the end of this
rule.)
6.3.b. Rates for policies of
credit accident and sickness insurance on which premiums are paid other than on a
single premium basis or for benefits on a basis other than illustrated in this
section shall be actuarially consistent with the rates specified in this
section.
6.4.
6.4.a. Credit accident and sickness insurance --
Exceptions, exclusions and limitations on coverage. -- The premium rates referred to
in Table 114-6A, Schedule A, Section 6.3 of this rule are for policies which contain
no exclusion for preexisting conditions except for those conditions which manifested
themselves to the insured by requiring medical diagnosis or treatment within the six
(6) months preceding the taking of the application for insurance and which caused
loss within six (6) months following the effective date of coverage: Provided, That
disability commencing after six months from the application date resulting from
preexisting conditions shall be covered.
6.4.b. The premium rates referred to in Table
114-6A, Schedule B, Section 6.3 of this rule are for policies which contain no
exclusions for preexisting conditions.
6.4.c. Any contract to which the foregoing rates
apply may contain provisions excluding or restricting coverage in the event of total
disability resulting from pregnancy, intentionally self-inflicted injuries, foreign
travel or residence, flight in nonscheduled aircraft, war or military service.
(Except in unusual cases this insurance should not be sold to military persons,
since their pay continues through periods of disability.) The policies may contain
the same age limitation for eligibility as set forth for credit life
policies.
6.5. Premium
payment. -- The amount charged to a debtor for credit life or credit accident and
sickness insurance shall not exceed the premiums charged by the insurer as computed
at the time the charge to the debtor is determined.
6.6. Restrictive coverage. -- Separate rate
filings required. -- If credit life or credit accident and sickness coverage is
offered which is more restrictive than provided in Sections 6.2 and 6.4 of this
rule, the insurer shall, by a separate filing, demonstrate to the satisfaction of
the Commissioner that the schedule of premium rates applicable to the more
restrictive forms will or can reasonably be expected to produce a loss ratio of
sixty percent (60%).
6.7. Deviations
from prima facie reasonable rates. -- An insurer may receive approval of a higher
premium rate to be used, on a credible case, or a class of business, or in
connection with a particular policy form, for insurance on debtors of creditors if
the insurer demonstrates, to the satisfaction of the Commissioner, that the
mortality or morbidity experience will or can reasonably be expected to produce a
loss ratio of sixty percent (60%).
6.8.
Refunds. -- With respect to policies issued and certificates subject to this rule:
6.8.a. The refund of an unearned amount paid by or
charged to the debtor for insurance in the case of reducing term credit life
insurance or of credit accident sickness insurance, on which the charges to the
debtor are payable by other than a single sum and of level term credit life
insurance shall be no less than the pro rata gross unearned amount
charged;
6.8.b. The refund of an
unearned amount paid by or charged to the debtor for insurance in the case of
reducing term credit life insurance or of credit accident and sickness insurance, on
which the insurance charges to the debtor are paid in a single sum shall not be less
than the amount computed by the "Sum of the Digits" formula, commonly known as the
"Rule of 78";
6.8.c. A premium refund or
credit need not be made if the amount of the refund or credit is less than one
dollar ($1.00);
6.8.d. A creditor, such
as a retailer, lending institution or other entity, that is a creditor in a consumer
credit sale or consumer loan and the seller of credit insurance on that loan must
automatically cancel the insurance and refund unearned consumer credit insurance
premiums when a consumer credit sale or consumer loan, refinancing, or consolidation
is paid in full. If credit insurance is sold to a consumer/debtor, the creditor,
such as a retailer, lending institution or other entity, that is the creditor in a
consumer credit sale or consumer loan, but is
not the seller of a
credit insurance policy on the sale or loan must notify a consumer debtor/insured of
his or her right to cancel his or her credit insurance policy and to receive a
refund for any unearned premiums paid when a consumer credit sale or loan,
refinancing or consolidation is paid in full. The following forms shall be used by
creditors:
6.8.d.1. The form incorporated into
this rule as Appendix A, which a retailer, lending institution or other entity that
is the creditor on the loan and seller or provider of the consumer credit insurance
may use to notify a consumer debtor/insured when his or her insurance coverage has
been cancelled and the unearned premiums have been automatically refunded by
deducting these premiums from the loan balance; provided, that the retailer, lending
institution or other entity may use an alternative notice form, which is consistent
with the general course of business of the creditor and which advises the consumer
debtor/insured of cancellation of his/her credit insurance and the application of a
refund of his/her credit insurance;
6.8.d.2. The form incorporated into this rule as
Appendix B, which a retailer, lending institution or other entity that is the
creditor on the loan and the seller of the insurance policy shall use to notify the
insurer that the debtor/insured's policy has been cancelled and that the insurer
must refund any unearned premiums to the consumer debtor/insured; and
6.8.d.3. The form incorporated into this rule as
Appendix C, which a retailer, lending institution or other entity that is the
creditor on the loan but not the seller of the insurance policy must use to notify a
consumer debtor/insured of his or her right to cancel any credit insurance policy
and to receive a refund of any unearned premiums paid for this insurance.
6.9. Responsibility for
reviewing lender's accounts. -- It is the responsibility of the insurer to review
each lender's account at least every eighteen (18) months verifying the accuracy of
premium payments, or other identifiable insurance charges, premium refunds, and
claims incurred and to be prepared to exhibit the results of the review upon request
of the Commissioner.
6.10. Filing of
experience information. -- An insurer doing credit life and/or credit accident and
sickness insurance business in this State shall annually file with the Insurance
Department a report of the insurer's credit life insurance experience and credit
accident and sickness insurance experience separately on reporting forms prescribed
by the Commissioner.
6.11. Separability.
-- If any provision of this rule is held invalid, the remainder of the rule shall
not be affected by that section's invalidity.
