Section 031-220-11 - RefundA. If credit life insurance on a debtor terminates prior to expiration of the period for which a charge for such insurance has been made to the debtor, by reason of early discharge of indebtedness by cash or refinancing, or by payment of a lump sum disability insurance claim, or otherwise, except by payment of a death claim under the credit life insurance policy, a refund of such charge for insurance shall be made to the debtor, or credited to his account.B. If credit accident and health insurance on a debtor terminates prior to expiration of the period for which a charge for such insurance has been made to the debtor, for any reason whatsoever except for payment of a lump sum disability insurance benefit, a refund of such charge for insurance shall be made to the debtor, or to his beneficiary or estate, as appropriate.C. In any refinancing or consolidation of an indebtedness, no policy provision covering the new indebtedness shall operate to deny benefits which would have been payable had the refinancing or consolidation not taken place.D. The following formulae for computing refunds of credit insurance premiums are hereby declared acceptable to the Superintendent for the kinds of coverage specified. Other refund formulae which any insurer desires to use must be filed with and approved by the Superintendent prior to use.(1) Monthly premium credit accident and health and monthly premium credit life refunds shall be either the full monthly premium or nothing, according to subsection F.(2) Single premium credit life and credit accident and health refunds shall be calculated on the "Rule of Anticipation" method.(3) For purposes of this rule, the "Rule of Anticipation" provides a refund equal to the premium cost of scheduled benefits subsequent to the date of cancellation or termination, computed at the schedule of premium rates in effect on the date of issue of the coverage.E. The requirements of the credit insurance law that refund formulae be filed with the Superintendent shall be considered fulfilled if the refund formulae are set forth in the individual policy or group certificate filed with the Superintendent.F. The refund calculations should utilize the 15 day rule. No charge for consumer credit insurance is to be made for the first fifteen (15) days of a one-month billing period and a full monthly premium may be charged for sixteen (16) days or more of the one-month billing period in which the cancellation occurred. For example, if a payment is made April 1, refunds calculated between April 1 and April 15 would refund to the consumer the premium for the entire month of April. If the appropriate day for calculation is April 16 through April 30, refunds would be calculated beginning from May 1 forward.G. No refund of less than $5 need be made.H. If a debtor has paid a premium for or an identifiable charge has been made for credit insurance, and such insurance is declined by the insurer or exceeds the maximum amount, duration, age or otherwise is not intended to become effective and the insurer has received all required information, the insurer or creditor shall promptly arrange for a refund to the debtor of any premium paid or identifiable charge made to him for such insurance. If any such refund is not made within 60 days, then it must be made (with interest at a minimum annual rate of 6 percent) during the lifetime and good health of the debtor. Otherwise, the insurance as issued will be deemed effective as of the date of obligation.02-031 C.M.R. ch. 220, § 11