N.M. Code R. § 13.18.2.28

Current through Register Vol. 35, No. 11, June 11, 2024

Section 13.18.2.28 - INCREASES IN OUTSTANDING BALANCE OPEN-END COVERAGE

A. If a debtor has credit accident and health insurance under an open-end outstanding balance policy, the policy may provide that an increase in the insurance benefits because of an increase in the indebtedness will be subject to conditions of insurability. Any policy provision regarding evidence of insurability for an increase will comply with the following.

(1) No charge for or cost of any such additional coverage will be incurred by a debtor except by voluntary acceptance of the coverage and submission of such lawful statement as is required by the insurer. Voluntary acceptance will not be deemed to have occurred except by a specific positive written response by the debtor to a notice of availability of the coverage; it may not be made automatic subject to an act of a rejection or notification by the debtor.

(2) The effective date of any such increase in coverage may be either of the following:

(a) the date on which the indebtedness is increased: In this event, however, if specific positive response is not received within 75 days of such increase, or if such response is not satisfactory to the insurer, then the additional insurance shall not be effective, and any premium which has been paid therefore shall be refunded or credited to the account of the debtor not more than 90 days after the increase in indebtedness; any claim which occurs when specific positive written response has not been received, but before the date by which such response must be received, will be paid if the debtor was eligible for the insurance under the terms of the policy; if the premium has been paid but not refunded or credited to the account of the debtor within 90 days after the increase in indebtedness the insurance shall be effective regardless of the eligibility of the debtor; or

(b) the date on which specific positive written response satisfactory to the insurer is received by the insurer.

B. Nothing herein shall preclude a policy provision prohibiting any increases in the amount of insurance while the debtor is disabled.

N.M. Code R. § 13.18.2.28

7/1/97; 13.18.2.28 NMAC - Rn, 13 NMAC 18.2.28, 12/31/07