Cal. Code Regs. tit. 10 § 2670.19

Current through Register 2024 Notice Reg. No. 45, November 8, 2024

Section 2670.19 - Benchmark Number Eight: Provisions for 30-Day Retroactive Credit Unemployment Insurance on an Installment Loan Plan of Indebtedness, Paying Monthly Payment on Installment Loan up to Twelve Monthly Payments

(a) When Coverage Is In Effect. Coverage is in effect for the term of years set forth in the certificate of insurance, from 12:01 a.m. on the effective date of coverage to 12:01 a.m. on the expiration date of coverage.

(b) Coverage Provided. The insurer will pay loss payment benefits to the master policyholder for the benefit of the certificate holder's account on a loan agreement or sales contract between the certificate holder and the master policyholder. The loan agreement or sales contract must provide for equal monthly installment payments or loans with a variable interest feature, or loans with a balloon payment. For loans with a variable interest rate of loans with a balloon payment the monthly benefit will not exceed the original monthly payment amount. The balloon payment is not covered. The insurer will pay the certificate holder's scheduled monthly payment on the loan agreement or sales contract if the certificate holder is involuntarily unemployed for at least 30 consecutive days. After the 30-day waiting period the insurer will pay the scheduled monthly payment retroactively to the first day of unemployment and while the unemployment continues. The scheduled monthly payment on the certificate holder's indebtedness must be at least 30 days delinquent for coverage to begin.

(c) Perils Insured. The insurer will pay benefits for loss of the certificate holder's employment income resulting from involuntary loss of employment, or unemployment due to labor disputes, strikes, or lockouts.

(d) Exclusions. Coverage does not apply to voluntary forfeiture of salary, wages, or employment income; resignation; retirement whether voluntary or mandatory; disability caused by accident, sickness, disease or pregnancy; or termination as the result of willful misconduct or criminal misconduct.

(e) Limit of Liability. The insurer will pay the scheduled monthly benefit or an amount equal to 1/30th of the scheduled monthly benefit for each day of a period less than thirty days which the certificate holder are involuntarily unemployed. The insurer will go back to the first day of the certificate holder's eligibility to count the number of days. The total of all payments is limited to the schedule shown in the table below. If the certificate holder's loss of employment occurs during the first 60 days after inception of coverage the maximum number of payment benefits payable during that period of involuntary unemployment will be one-half of the total benefits payable as provided in the schedule.

The maximum number of monthly benefits provided shall not exceed the remaining originally scheduled total of loan payments at the time of loss. In the event that the certificate holder's loan or credit agreement is extended or modified in any manner, the insurer's liability will never be more that the total amount of monthly benefits that would have been provided without such modification or extension.

Term of Loss	Maximum Benefits Payable for Loss After 60 Days	Maximum Number of Benefits Payable for Loss Within the 1^st60 days

1-13 months	4	2
14-19 months	5	2.5
20-25 months	6	3
26-31 months	7	3.5
32-37 months	8	4
38-43 months	9	4.5
44-49 months	10	5
50-55 months	11	5.5
56-61 months	12	6

No more that the total monthly benefits shown above will be payable during the term of coverage. It will include all amounts paid for involuntary unemployment, whether during one or more periods of unemployment.

(f) Eligibility

To be eligible for loss of employment income benefits, as of the effective date of the certificate the certificate holder must be gainfully employed for at least 12 consecutive months except for vacation time, prior to the effective date of this coverage, except employment interruption for less than 30 consecutive days during the previous 12 month period or employment interrupted by lockout, general strike, or unionized labor dispute shall not eliminate a certificate holder from eligibility. Self-employed individuals or independent contractors or seasonal employees are not eligible for coverage. To receive loss of income benefits, the certificate holder must qualify for unemployment benefits under the certificate holder's state's unemployment laws and must register for work with the certificate holder's state employment office or a recognized employment agency within 15 days after the last day employed and remain so registered during the claim period if the loss of employment occurred as the result of either layoff or employer termination; or provide the insurer with verification of loss which occurred as the result of a general strike, unionized labor dispute or lockout from sources as determined by the insurer at the time of loss. Coverage will not be denied if the certificate holder does not qualify for state unemployment benefits because the certificate holder's former employer was not required to contribute to the state unemployment fund. Re-eligibility for remaining benefits will begin on the 1st day of unemployment if the employment period is less than 30 days. If the unemployment period is greater than 30 days, eligibility for payment will begin after the 30th day of unemployment.

Cal. Code Regs. Tit. 10, § 2670.19

1. New section filed 3-10-2003; operative 4-9-2003. Submitted to OAL for printing only pursuant to Government Code section 11343.8 as a regulation that establishes rates in accordance with Government Code section 11340.9(g) (Register 2003, No. 11).
2. Change without regulatory effect withdrawing and repealing section pursuant to settlement agreement in Consumer Credit Insurance Association v. John Garamendi (California Superior Court No. 03CS00533) filed 5-27-2004 pursuant to section 100, title 1, California Code of Regulations (Register 2004, No. 22).
3. New section filed 4-28-2006; operative 5-28-2006. Submitted to OAL for printing only pursuant to Government Code section 11343.8 as a regulation that establishes rates in accordance with Government Code section 11340.9(g) (Register 2006, No. 17).
4. Change without regulatory effect amending subsection (f) filed 7-14-2021 pursuant to section 100, title 1, California Code of Regulations (Register 2021, No. 29). Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20.

Note: Authority cited: Sections 779.21, 779.36, 12921 and 12926, Insurance Code; Credit Insurance General Agents Association v. Payne, 16 Cal.3d 651 (1976); and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference: Sections 779.36, 1861.01 and 1861.05, Insurance Code.

1. New section filed 3-10-2003; operative 4-9-2003. Submitted to OAL for printing only pursuant to Government Code section 11343.8 as a regulation that establishes rates in accordance with Government Code section 11340.9(g) (Register 2003, No. 11).
2. Change without regulatory effect withdrawing and repealing section pursuant to settlement agreement inConsumer Credit Insurance Associationv.John Garamendi(California Superior Court No. 03CS00533) filed 5-27-2004 pursuant to section 100, title 1, California Code of Regulations (Register 2004, No. 22).
3. New section filed 4-28-2006; operative 5-28-2006. Submitted to OAL for printing only pursuant to Government Code section 11343.8 as a regulation that establishes rates in accordance with Government Code section 11340.9(g)(Register 2006, No. 17).
4. Change without regulatory effect amending subsection (f) filed 7-14-2021 pursuant to section 100, title 1, California Code of Regulations (Register 2021, No. 29). Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20.