Section Ins 1201.09 - Nominal Rates for Credit Accident and Health Insurance(a) The premium rates in (b) below shall be used to determine the single lives credit accident and health insurance earned premiums at the nominal rate level which are to be reported by each insurer pursuant to Ins 1201.11.(b) The nominal credit accident and health insurance premium rates for the insured portion of an indebtedness repayable in equal installments shall be as set forth in (1) and (2) below for the benefits described in paragraph (e) below: (1) If premiums are payable on a single premium basis, the nominal premium rates shall be calculated as follows:a. Where the benefit period is coterminous with the remaining loan term, the nominal rates shall be calculated as the present value of the claim costs plus an allowance for administrative costs as in the following formula: Click here to view image
b. For critical period coverage, the nominal premium rates shall be calculated by multiplying the single premium calculated in a. above by the ratio of single claim costs for the critical period and the term of the loan as indicated by the following formula: Click here to view image
c. Where "SPn"and "CPSPn" mean the nominal single premium for $100 of initial insured indebtedness;d. Where "SSCen" and "SSCeCP" mean the single claim cost per $100 initial insured indebtedness from the two-table "Credit Accident and Health Morbidity Study, 1968 NAIC Proceedings, Volume II, p. 638" and "1970 NAIC Proceedings, Volume I, p. 332", incorporated herein, for retroactive or non-retroactive coverage as the case may be, with an elimination period of "e" and a loan term of "n";e. Where "n" means the term of the indebtedness in months; andf. Where "e" means the elimination period, either 14 or 30 days; and(2) If premiums are paid on the basis of a premium rate per month per $1000 of outstanding indebtedness, the nominal monthly outstanding balance premium rate shall be calculated as the amount that would amortize the single premium rate over the term of coverage, as in the following formula: b. Where "SPn"means the nominal single premium per $100 of initial insured indebtedness repayable in n equal monthly installments;c. Where "OPn" means the nominal monthly outstanding balance premium per $1000; andd. Where "n" means the original repayment period in months. (c) If the insurance provided is a different form of coverage than the forms of coverage for which appropriate nominal rates are specified in paragraph (a) above, other methods of determining nominal premium rates for such different forms of credit accident and health insurance may be used provided the resulting rates shall be actuarially consistent in the aggregate with the nominal premium rates determined by (a)(1) above.(d) The nominal premium rates determined by paragraphs (a) and (b) shall apply to policies providing credit accident and health insurance that is offered to all debtors, which is to be issued with or without evidence of insurability.(e) The nominal premium rate referenced in (c) above shall contain: (1) A definition of disability no more restrictive during the first year of disability than requiring that the insured debtor be unable to perform the substantial duties of his or her occupation, and, thereafter, the substantial duties of any occupation for which the insured is reasonably fitted by education, training, or experience;(2) No provisions excluding or denying a claim for disability resulting from pre-existing conditions except for those conditions manifesting themselves to the insured debtor by requiring medical treatment or diagnosis within 6 months preceding the effective date of the debtor's coverage and which caused loss within 6 months following the effective date of coverage;(3) No other provision which excludes or restricts liability in the event of disability caused in a specified manner except that it may contain provisions excluding or restricting coverage in the event of pregnancy, intentionally self-inflicted injuries, and flight in non-scheduled aircraft;(4) No age restrictions or only age restrictions that are no less favorable to the insured debtors than age restrictions making ineligible for coverage debtors 65 or over at the time the indebtedness is incurred or debtors who will have attained age 66 or over on the maturity date of the indebtedness;(5) A daily benefit equal in amount to 1/30 of the scheduled monthly payments on the indebtedness; and(6) No actively-at-work test that requires that the debtor be employed more than 30 hours per week.(f) Subparagraph (e)(1) shall not apply to lump sum disability coverage.(g) If premiums are to be determined according to the age of the insured debtor or by age brackets, the nominal rates for each age or age bracket shall be derived by adjustments in the appropriate nominal rate stated in Ins 1201.08(b) through (d) above so that the nominal rates arrived at shall be actuarially consistent with the nominal rates set out in paragraphs (b) or (c) above.(h) All such rates in (g) above shall be filed with and approved by the commissioner, if actuarially consistent, prior to use.(i) The premium rates for joint lives credit accident and health insurance earned premiums at the nominal rate level shall be calculated by multiplying the single lives credit accident and health insurance premiums by a factor of 1.64.(j) Insurers may use a rate for the nominal monthly outstanding balance premium rate that is independent of the term of the loan.(k) In calculating a rate that is independent of the loan term, the insurer shall: (1) Calculate the rate as the weighted average of the prescribed nominal monthly outstanding balance premium rates;(2) Use the outstanding principal amounts as weights; and(3) Demonstrate that this composite term premium rate is revenue neutral compared to the term specific rates otherwise prescribed.(l) Insurers may use an alternative rate development methodology for calculating nominal monthly outstanding balance premium rates that are independent of the term of the loan, with the commissioner's approval, provided that such rates are actuarially equivalent to the actual premium rates produced by Ins 1201.10.N.H. Admin. Code § Ins 1201.09
#1900, eff 1-1-82; ss by #2441, eff 1-1-84; amd by #3196, eff 2-5-86; ss by #4287, eff 7-1-87; ss by #5650, eff 7-1-93, EXPIRED 7-1-99
New. #7146, eff 4-1-00; amd by #7789, eff 11-1-02; ss by #9611, eff 1-4-10
Amended by Volume XXXVIII Number 06, Filed February 8, 2018, Proposed by #12474, Effective 2/2/2018, Expires 2/2/2028.