3 Colo. Code Regs. § 702-4-9-2-9
Current through Register Vol. 47, No. 16, August 25, 2024
Section 3 CCR 702-4-9-2-9 - RefundsA. Refund Methodology 1.Except as otherwise permitted in Section 9.A.2. of this regulation, the amount of the refund shall not be less than that calculated using the Rule of Anticipation Refund Method. For level benefit plans over the premium payment period, the method used shall produce a refund no less favorable to the insured than the Pro-rata Refund Method. For other plans, it is acceptable, at the insurer's option, to request the use of alternative methodologies which shall reflect the fact that premiums are earned proportionately to the coverage.
2. Alternative methods in specified instances.a. The Actuarial Refund Method. Actuarial Refund Method means the method in which the refund is equal to A multiplied by B, divided by C, where: A equals the premium paid for the total coverage originally scheduled; B equals the sum of the originally scheduled amounts of insurance for each month in the term of insurance following the date of termination; and C equals the sum of the amounts of insurance for each month in the term of coverage originally scheduled. The Actuarial Refund Method may be used for all types of credit life insurance and credit property insurance.b. The Rule of 78 (sum of the digits) Refund Method. The Rule of 78 Refund Method may be used for credit life insurance in which the amount of coverage decreases by approximately the same amount each month, and the amount of coverage in the final month is equal to or less than the approximate amount by which coverage decreases each month.c. The Pro-rata Refund Method. The Pro-rata Refund Method may be used for all credit insurance in which the amount of coverage remains level throughout the entire duration of the coverage.d. The Mean Method. The Mean Method is the average of the Sum of Digits Refund Method and the Pro-rata Refund Method and may be used for credit accident and health insurance and credit unemployment insurance in which the maximum total indemnity amount decreases by a uniform amount each month throughout the term of coverage and the amount of indemnity in the final month of coverage is equal to or less than the amount by which the maximum total indemnity amount decreases each month.B. Partial Month Calculation In the event that the insurer is using a refund methodology that requires the use of complete months, no charge for credit insurance shall be made for a partial month of fifteen (15) days or less. A full month may be charged for sixteen (16) days or more of a loan month.
C. Minimum Refund Refunds shall be made according to § 10-10-110(2)(b), C.R.S.
D. Involuntary Prepayment of Indebtedness If an indebtedness is prepaid by the proceeds of one distinct benefit type of the credit insurance coverage or coverages covering the debtor, then it shall be the responsibility of the insurer issuing another kind of coverage, upon notification by the creditor or by the insurer if the insurer issued additional kinds of insurance, that the indebtedness has been paid off and to refund the unearned premium, if any. The refund shall be calculated according to the acceptable methodologies of this Section 9, and shall be paid or credited to the debtor, the beneficiary named by the debtor other than the creditor, or to the debtor's estate, as appropriate.
For example, if the indebtedness is prepaid by the proceeds of a life insurance policy or benefit, the unearned premium of the accident and health, unemployment, and property benefits or policies shall be refunded.
E. Voluntary Prepayment of Indebtedness If a debtor prepays the indebtedness other than through the proceeds of credit insurance coverage, all credit insurance coverages or distinct benefits covering the indebtedness shall be terminated and a refund of the unearned premium shall be paid or credited to the debtor. However, if a claim under such coverage is in progress at the time of prepayment, the claim shall continue as if there had been no prepayment. Under this circumstance, no refund of unearned credit insurance premium shall be made until the claim has been finalized and the refund for that coverage shall be calculated from the date the event or occurrence giving rise to the claim ended.
F. Refund of Creditor Contribution to Payment of Premium If a creditor pays, from the creditor's own funds, a portion of the premium for any coverage for which an unearned premium refund becomes payable, the insurer may pay to the creditor and the creditor may retain an amount of the refund for the coverage that is equal to the refund as calculated in Section 9 of this regulation, multiplied by the proportion of the total premium paid by the creditor to the total amount of premium originally paid for the coverage.
37 CR 11, June 10, 2014, effective 7/1/201437 CR 12, June 25, 2014, effective 7/15/2014Colorado Register, Vol 37, No. 14. July 25, 2014, effective 8/15/201437 CR 23, December 10, 2014, effective 1/1/201538 CR 03, February 10, 2015, effective 3/15/201538 CR 06, March 25, 2015, effective 4/30/201538 CR 09, May 10, 2015, effective 6/1/201538 CR 13, July 10, 2015, effective 7/30/201538 CR 19, October 10, 2015, effective 11/1/201538 CR 21, November 10, 2015, effective 1/1/201638 CR 23, December 10, 2015, effective 1/1/201639 CR 01, January 10, 2016, effective 2/1/201639 CR 05, March 10, 2016, effective 4/1/201639 CR 08, April 25, 2016, effective 5/15/201639 CR 19, October 10, 2016, effective 11/1/201639 CR 20, October 25, 2016, effective 1/1/201739 CR 22, November 25, 2016, effective 1/1/201739 CR 23, December 10, 2016, effective 1/1/201739 CR 23, December 25, 2016, effective 1/1/201740 CR 03, February 10, 2017, effective 3/15/201740 CR 09, May 10, 2017, effective 6/1/201740 CR 15, August 10, 2017, effective 9/1/201740 CR 17, September 10, 2017, effective 10/1/201740 CR 21, November 10, 2017, effective 12/1/201741 CR 04, February 25, 2018, effective 4/1/201841 CR 05, March 10, 2018, effective 6/1/201841 CR 08, April 25, 2018, effective 6/1/201841 CR 09, May 10, 2018, effective 6/1/201841 CR 11, June 10, 2018, effective 7/1/201841 CR 15, August 10, 2018, effective 9/1/201841 CR 17, September 10, 2018, effective 10/1/201841 CR 18, September 25, 2018, effective 10/15/201841 CR 21, November 10, 2018, effective 12/1/201841 CR 23, December 10, 2018, effective 1/1/201942 CR 01, January 10, 2019, effective 2/1/201941 CR 19, October 10, 2018, effective 3/1/201942 CR 03, February 10, 2019, effective 4/1/201942 CR 04, February 25, 2019, effective 4/1/201942 CR 06, March 25, 2019, effective 6/1/201942 CR 08, April 10, 2019, effective 6/1/201942 CR 15, August 10, 2019, effective 9/1/201942 CR 17, September 10, 2019, effective 10/1/201943 CR 02, January 25, 2020, effective 12/20/201943 CR 02, January 25, 2020, effective 12/23/201942 CR 23, December 10, 2019, effective 1/1/202043 CR 01, January 10, 2020, effective 2/1/202042 CR 24, December 25, 2019, effective 2/2/202043 CR 06, March 25, 2020, effective 4/15/202043 CR 10, May 25, 2020, effective 8/1/202043 CR 14, July 25, 2020, effective 8/15/202043 CR 17, September 10, 2020, effective 10/1/202043 CR 18, September 25, 2020, effective 11/1/202043 CR 22, November 25, 2020, effective 12/15/202043 CR 24, December 25, 2020, effective 1/15/202144 CR 03, February 10, 2021, effective 3/15/202144 CR 08, April 25, 2021, effective 5/15/202144 CR 09, May 10, 2021, effective 6/1/202144 CR 10, May 25, 2021, effective 6/14/202144 CR 10, May 25, 2021, effective 6/15/202144 CR 13, July 10, 2021, effective 8/1/202144 CR 15, August 10, 2021, effective 9/1/202144 CR 19, October 10, 2021, effective 11/1/202144 CR 21, November 10, 2021, effective 12/1/202144 CR 23, December 10, 2021, effective 12/30/202144 CR 21, November 10, 2021, effective 1/1/202244 CR 23, December 10, 2021, effective 1/15/202244 CR 24, December 25, 2021, effective 1/15/202245 CR 03, February 10, 2022, effective 3/2/202245 CR 08, April 25, 2022, effective 5/30/202245 CR 09, May 10, 2022, effective 5/30/202245 CR 10, May 25, 2022, effective 6/14/202245 CR 11, June 10, 2022, effective 6/30/202245 CR 11, June 10, 2022, effective 7/15/202245 CR 19, October 10, 2022, effective 11/1/202245 CR 20, October 25, 2022, effective 11/14/202245 CR 21, November 10, 2022, effective 11/30/202245 CR 24, December 25, 2022, effective 1/14/202346 CR 01, January 10, 2023, effective 2/14/202346 CR 06, March 25, 2023, effective 2/15/202346 CR 03, February 10, 2022, effective 3/2/202346 CR 04, February 25, 2023, effective 3/17/202346 CR 05, March 10, 2023, effective 4/15/202346 CR 09, May 10, 2023, effective 5/30/202346 CR 09, May 10, 2023, effective 6/1/202346 CR 10, May 25, 2023, effective 6/15/202346 CR 11, June 10, 2023, effective 6/30/2023