§ 73.109. A and H insurance rate standards.
(a) Prima facie A&H rates. Premium rates for credit A and H insurance benefits, as described in § 73.107(a) (relating to accident and health insurance benefits), may not exceed the prima facie premium rates referenced in this section and published in the Pennsylvania Bulletin, unless higher premium rates are approved under § 73.122 (relating to deviated rates). Premium rates for benefits that differ from those benefits described in § 73.107(a) may not exceed premium rates that are actuarially consistent with the prima facie premiums rates referenced in this section and published in the Pennsylvania Bulletin.
(b) Symbols. The symbols used in this section shall have the following meanings:
(1) n = coverage period in months.
(2) Opn = monthly prima facie premium rate per $1,000 of gross unpaid indebtedness.
(3) SPn = single premium prima facie premium rate per $100 of initial insured gross indebtedness, as defined in § 73.103 (relating to definitions), repayable in n equal monthly installments.
(c) Debtor insurance charge. The amount charged a debtor by a creditor for credit A and H insurance may not exceed the premium amount charged by the insurer, as computed at the time the charge to the debtor is determined.
(d) Single premium rates for full benefit and full term periods. If premiums are payable on a single premium basis for insurance with a full benefit period and a full term coverage period, the single premium prima facie premium rates for credit A and H insurance on a single life shall be as published in the Pennsylvania Bulletin.
(e) Single premium rates for limited benefit and limited term periods. If premiums are payable on a single premium basis for insurance with a limited term coverage period and a benefit period equal to the limited term coverage period, the prima facie premium rates shall be as published in the Pennsylvania Bulletin, for an installment period equal to the number of monthly installment payments in the limited term coverage period. The premium shall be determined by multiplying the prima facie premium rate by the monthly installment payment, by the number of months in the limited term coverage period, divided by 100.
(f) Single premium rates for limited benefit and full or limited term periods. If premiums are payable on a single premium basis for insurance with a limited benefit period for a full term or limited term coverage period, the single premium rates for credit A and H insurance on a single life may not exceed premium rates that are actuarially consistent with the single premium prima facie premium rates published in the Pennsylvania Bulletin.
(g) Monthly premium rates for full benefit and full term periods. If premiums are payable on a monthly basis for insurance with a full balance benefit period for a full term coverage period, the monthly prima facie premium rates for credit A and H insurance on a single life shall be as published in the Pennsylvania Bulletin. The monthly prima facie premium rates shall be calculated in accordance with the following formula:
(h) Monthly premium rates for limited benefit period and limited term periods. If premiums are payable on a monthly basis for insurance with a limited term coverage period and a benefit period equal to the limited term coverage period, the monthly prima facie premium rates shall be as published in the Pennsylvania Bulletin for an installment period equal to the number of monthly installment payments in the limited term coverage period. The monthly premium shall be determined by multiplying the prima facie premium rate by the monthly loan payment, by the remaining number of months in the limited term coverage period, divided by 1,000.
(i) Monthly premium rates for limited benefit and full or limited term periods. If premiums are payable on a monthly basis for insurance with a limited benefit period for a full term or limited term coverage period, the monthly premium rates for credit A and H insurance on a single life may not exceed premium rates that are actuarially consistent with the monthly prima facie premium rates published in the Pennsylvania Bulletin
(j) Joint rates.
(1) When each debtor is insured for 100% of the monthly A and H payment, the prima facie premium rates for joint credit A and H insurance shall equal 180% of the prima facie premium rates for single A and H coverage.
(2) When each debtor is insured for a specific portion of the monthly disability payment, the prima facie premium rates for joint credit A and H insurance shall equal 100% of the prima facie premium rates for single A and H coverage.
(k) Actuarially consistent rates. For credit A and H insurance offered on any other basis, prima facie premium rates shall be actuarially consistent with the rate standards of subsections (d)—(i).
(l) Adjustment of prima facie rates and loss ratio standards. By June 19, 2001, and at least every 3 years thereafter, the Department will review the appropriateness of the prima facie premium rates referenced in this section based upon Commonwealth experience data for the preceding 3-calendar years. The nonclaim element of the prima facie premium rates may not be adjusted unless an adjustment is necessary under subsection (m). An adjustment to the prima facie premium rates will not be made if the change in prima facie premium rates so determined would be less than 5%. If an adjustment to the prima facie premium rates is indicated, the Department will publish the new prima facie premium rates in the Pennsylvania Bulletin. If an adjustment to the loss ratio standards is indicated, the Department will propose a regulatory amendment to § 73.123 (relating to loss ratio standards) to reflect the change.
(m) Review of nonclaim elements. By June 19, 2007, and at least every 9 years thereafter, the Department will review the changes in the average term and amount of coverage, the changes in fixed and variable expenses and the reasonable profit margin for insurance companies writing credit A and H insurance in this Commonwealth. If this review indicates that a change in the nonclaim elements of the premium rates is necessary, the Department will propose a regulatory amendment to the loss ratio standards in § 73.123 and thereafter publish new prima facie premium rates in the Pennsylvania Bulletin.
Cross References This section cited in 31 Pa. Code § 73.103 (relating to definitions); 31 Pa. Code § 73.107 (relating to accident and health insurance benefits); 31 Pa. Code § 73.134 (relating to compensatioin of producers and creditors); and 31 Pa. Code § 173.136 (relating to filing of forms and rates).
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