Okla. Admin. Code § 365:10-5-66

Current through Vol. 42, No. 7, December 16, 2024

Section 365:10-5-66 - Standard of benefits for credit accident and health insurance

(a)Purpose. The purpose of this Part is to, with respect to credit accident and health insurance:

(1) Establish standards;

(2) Provide a mathematical formula for rates for premiums;

(3) Establish to whom such insurance contract may be issued; and

(4) Define "total disability".

(b)Standards and principles. The standards and principles for the application of the presumptively reasonable rates set forth in this Part for credit accident and health insurance are as follows:

(1) The initial amount of insured indebtedness to which the rate is applied shall not exceed the aggregate of the insured portion of the periodic scheduled unpaid installments of the indebtedness.

(2) The indebtedness must be repayable in monthly or other periodic installments during the period of coverage.

(3) The rates for premiums payable on other than a single premium basis shall be the mathematical equivalent of the rates set forth in 365:10-5-65. Such premium rates will be deemed the mathematic equivalent of the foregoing single premium rates, if such rates produce a total premium for any duration and amount of insurance equal to the corresponding single premium for the same duration and amount of insurance.

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Where Spn = Single Premium Rate per $100 of initial insured indebtedness repayable in "n" equal monthly installments, Opn = Monthly Outstanding Balance Premium Rate per $1,000 n = Original repayment period, in months.

(4) If premiums are paid on the basis of a premium rate per month per thousand of outstanding insured indebtedness, these premiums shall be computed according to the formula as set forth in 365:10-5-66(b)(3). The actuarial equivalent of such formula shall be used if the coverage provided is a constant maximum indemnity for a given period of time.

(5) The credit accident and health insurance contract may require, at the time of application for insurance and periodically thereafter, written and signed evidence of insurability (inclusive of age and employment) and where offered, shall be offered to all eligible debtors, and shall, as a condition precedent to use of the presumptively reasonable accident and health rates, contain:

(A) No provisions excluding a claim for disability resulting from pre-existing conditions, except for those conditions for which the insured debtor received medical diagnosis or treatment within the one (1) year period immediately preceding the date of application for such insurance, or of which the insured suffered symptoms which would cause an ordinarily prudent person to seek diagnosis, care or treatment within the one (1) year period immediately preceding the date of application for such insurance, and which caused a period of loss within six (6) months following the date of application for such insurance; provided, however, that any subsequent period of disability resulting from such condition that commences or recommences more than six (6) months after the date of the application for such insurance shall be covered under the provisions of the policy.

(B) Failure to comply with the requirements set forth in this paragraph (5), in violation of this Part, shall be subject to any applicable fine set forth in the Oklahoma Insurance Code and this Part, including retroactive premium refunds as provided in 365:10-5-72.

(C) No provision more restrictive as to validity of insurance than contestability based upon material misrepresentation and 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:

(i) elective abortion;

(ii) normal pregnancy, except for complications of pregnancy;

(iii) intentionally self-infected injuries;

(iv) flight in non-scheduled aircraft;

(v) foreign travel or residence; and,

(vi) loss resulting from war or military service An insurer may not rely on material misrepresentation as a defense against the payment of a claim unless the insurer required the insured to sign a written statement in which the alleged material misrepresentation was made.

(D) No age restrictions except restrictions making ineligible for coverage debtors sixty-five (65) years of age or over at the time that the indebtedness is incurred or debtors who have attained sixty-six (66) years of age or over on the maturity date of the indebtedness, or else no age restriction.

(E) A definition of "total disability" which provides that during the first eighteen (18) months of such disability, the definition of "total disability" must relate such disability to the occupation of the debtor at the time the disability occurred. After such disability continues for more than eighteen (18) months, the definition of "total disability" may relate such continuing disability to the inability to perform any occupation for which the debtor is reasonably fitted by education, training or experience.

(6) The benefit provided under such credit accident and health insurance contract shall be payable on the basis of a daily benefit equal to 1/30 of the scheduled monthly benefit.

Okla. Admin. Code § 365:10-5-66

Amended at 10 Ok Reg 3049, eff 10-1-93; Amended at 11 Ok Reg 1847, eff 5-15-94