§ 73.103. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
A and H—Accident and health insurance.
Account—The coverage for a single line of insurance offered to a single type of business by one creditor. The term includes coverage written on a group or individual policy.
Act—The Model Act for the Regulation of Credit Life Insurance and Credit Accident and Health Insurance (40 P. S. § § 1007.1—1007.15).
Agent—A person defined in section 601 of The Insurance Department Act of 1921 (40 P. S. § 231).
Amount financed—The amount on which interest charges are calculated.
Amount of level lease insurance—In connection with a lease transaction, the amount of death benefit equal to the residual payment, plus any applicable taxes on the residual payment.
Balloon amount—The excess of the final payment on a balloon loan over the amount of one periodic installment payment.
Balloon loan—A loan which provides for periodic installment payments of a stated amount during the term of the indebtedness and for a final payment at the end of the term of the indebtedness which is substantially more than the amount of one periodic installment payment and less than the initial net unpaid indebtedness.
Broker—A person defined in section 621 of The Insurance Department Act of 1921 (40 P. S. § 251).
Closed end loan—Indebtedness which is not an open end loan or a lease.
Commissioner—The Insurance Commissioner of the Commonwealth.
Composite term period—The installment periods for which composite term premium rates will be charged.
Composite term premium rate—Premium rates which do not vary based on the number of monthly installments and which meet the requirements of § 73.120 (relating to composite term premium rate).
Contributory insurance—Insurance for which the debtor is charged an identifiable charge.
Credit accident and health insurance—Insurance as defined in section 2(b)(2) of the act (40 P. S. § 1007.2(b)(2)).
Credit instrument—A loan or sales instrument or agreement.
Credit insurance—Insurance subject to the act and section 641 of The Insurance Department Act of 1921 (40 P. S. § 281).
Credit involuntary unemployment insurance—Credit unemployment insurance paid in the event of the debtor’s unemployment due to no choice of the debtor.
Credit life insurance—Insurance as defined in section 2(b)(1) of the act.
Credit life insurance with TPD—Insurance on the life of a debtor paid under or in connection with a specific loan or other credit transaction in the event of the debtor’s death or total and permanent disability.
Credit unemployment insurance—Insurance on a debtor to provide indemnity for payments becoming due on a specific loan or other credit transaction while the debtor is unemployed as defined in the group certificate or individual policy.
Credit voluntary unemployment insurance—Credit unemployment insurance paid in the event of the debtor’s unemployment due to a choice made by the debtor.
Creditor—As defined in section 2(b)(3) of the act.
Debtor—As defined in section 2(b)(4) of the act.
Decreasing term lease insurance amount—The amount required to liquidate the lease obligation excluding the amount of any monthly lease payments paid at the beginning of a lease and excluding the residual value.
Department—The Insurance Department of the Commonwealth.
Electronic rate book—An electronic data system programmed and used solely for the calculation and computation of installment loans and calculation and computation of insurance amount, premium rates and refunds.
Excess benefits—The portion of the insurance benefit that exceeds the outstanding indebtedness.
Fixed residual value financing—The manner of financing a motor vehicle purchase whereby a buyer, who is listed as the owner on the title of a motor vehicle, agrees to select and perform one of the following options, at the conclusion of a predetermined schedule of installment payments made in substantially equal periods and in substantially equal amounts:(i) Satisfying the balance of the contractual amount owing.
(ii) Refinancing any balance owing on the terms previously agreed upon at the original execution of the installment sales contract.
(iii) Surrendering the motor vehicle as agreed upon at the original execution of the installment sale contract.
Full benefit period coverage—Insurance coverage which provides protection for a benefit period equal to the shorter of the duration of disability or unemployment minus any elimination period and the full term of coverage remaining when the disability or unemployment benefits first become payable.
Full term insurance coverage—Insurance coverage for a benefit period equal to the term of the indebtedness remaining at the time coverage is elected.
Grace period—The period during which a premium may be paid after the premium due date.
Identifiable charge—The amount a creditor charges a debtor specifically for credit insurance. A differential in finance, interest, service or similar charges made to debtors who are in like circumstances, except for their insured or noninsured status, is considered an identifiable charge.
Indebtedness—The total amount payable by a debtor to a creditor in connection with a loan or other credit transaction.(i) Actual gross unpaid indebtedness. The scheduled gross unpaid indebtedness plus any past-due installment payments and minus any prepaid installment payments.
(ii) Actual net unpaid indebtedness. The amount necessary to liquidate the actual unpaid indebtedness in a single sum excluding unearned interest, but including any prepayment penalty.
(iii) Initial insured indebtedness.
(A) If coverage is provided on a gross indebtedness basis, the sum of the installment payments under the contract of indebtedness as of the date the indebtedness is incurred, subject to any maximum dollar amount of coverage specified in the group policy and group certificate or individual policy.
(B) If coverage is provided on a net indebtedness basis, the amount of the indebtedness excluding the unearned interest under the contract of indebtedness as of the date the indebtedness is incurred, subject to any maximum dollar amount of coverage specified in the group policy and group certificate or individual policy.
(iv) Scheduled gross unpaid indebtedness. The sum of the scheduled remaining installment payments under the contract of indebtedness, including unearned interest.
(v) Scheduled net unpaid indebtedness. The amount necessary to liquidate the scheduled unpaid indebtedness in a single sum excluding unearned interest but including any prepayment penalty.
Initial amount of decreasing lease insurance—The excess of the amount of death benefit payable in the event of death of the lessee during the first month of the lease, over the amount of level lease insurance, as defined in this section. The term does not include the amount of the monthly lease payment paid at the beginning of the lease.
Joint coverage—Credit insurance coverage on any two or more persons who are jointly liable for repayment of an indebtedness or fulfillment of a lease obligation.
Limited benefit period coverage—Insurance coverage which provides protection for a benefit period equal to the shorter of the duration of disability or unemployment minus any elimination period and a period less than the full term of coverage remaining when the disability or unemployment benefits first become payable.
Limited term insurance coverage—Insurance coverage for a benefit period less than the term of the indebtedness remaining at the time coverage is elected. Insurance coverage terminates at the insured debtor’s attained age as set forth in the group certificate or individual policy or when the truncated coverage terminates.
Lockout—The discharge of employes by their employer due to a labor dispute, including discharge as a result of an employer’s dislike of employes’ activities as a union, or the temporary closing of the place of employment by an employer without formally discharging the employes in an effort to discourage union activities, gain acceptance of the employer’s view or effect a labor compromise which is more favorable to the employer in comparison to the demands made by the employes.
Loss ratio—The incurred claims during the experience period divided by the actual earned premium during the experience period.
Open end loan—A credit plan which may be drawn upon by a debtor without renegotiating with the creditor.
Physician—A medical doctor, chiropractor or doctor of osteopathy.
Prima facie premium rates—The premium rates established by the Department and published in the Pennsylvania Bulletin. Prima facie premium rates shall be published in the Pennsylvania Bulletin by June 19, 1998, and thereafter as established by and referenced in § § 73.106, 73.109 and 73.112 (relating to life insurance rate standards; A & H insurance rate standards; and involuntary unemployment insurance rate standards).
Producer—An agent or broker.
Prominent type—Font or formatting techniques which differentiate selected text from other text. The term includes, for example, capital letters, contrasting color and underscoring.
Residual payment—The amount that shall be paid by the lessee at the end of the lease term if the lessee elects to purchase the property that is the subject of the lease.
Single coverage—Credit insurance coverage on one person who is liable for repayment of an indebtedness or fulfillment of a lease obligation.
TPD—Total and permanent disability.
Term of insurance coverage—The period during which a group certificate or individual policy is effective.
2001 CSO Male Composite Ultimate Mortality Table—The ultimate version of the mortality table, consisting of separate rates of mortality for male lives that do not distinguish between smokers and nonsmokers, developed by the American Academy of Actuaries CSO Task Force from the Valuation Basic Mortality Table developed by the Society of Actuaries Individual Life Insurance Valuation Mortality Task Force, and adopted by the National Association of Insurance Commissioners in December 2002. The table includes both the age-nearest birthday and age-last birthday version.
Truncated coverage—Credit insurance coverage as defined in this section that meets the requirements in § § 73.106(11), 73.109(10) and 73.112(10), and provides a term of insurance coverage for a period that is shorter than the full term of the indebtedness remaining at the time the insurance coverage is elected. The term does not include credit insurance coverage which terminates on attainment of a specific age.
Variable interest loan—A loan which has an interest rate that may change during the term of the loan which causes a change in either the amount of the installment payment or the term of the loan.
Source The provisions of this § 73.103 amended July 14, 2006, effective January 1, 2007, 36 Pa.B. 3665. Immediately preceding text appears at serial pages (242923) to (242927).
Cross References This section cited in 31 Pa. Code § 73.106 (relating to life insurance rate standards); 31 Pa. Code § 73.109 (relating to A and H insurance rate standards); 31 Pa. Code § 73.110 (relating to involuntary unemployment insurance benefits); and 31 Pa. Code § 73.141 (relating to credit insurance on lease transactions).
No part of the information on this site may be reproduced for profit or sold for profit.
This material has been drawn directly from the official Pennsylvania Code full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.
