OAR 836-060-0031: Credit Health Insurance Rates

(1) Unless data submitted to the Director under OAR 836-060-0043 justify a higher rate in the Director's opinion, credit health insurance premium rates for the insured portion of an indebtedness repayable in equal monthly installments, where the insured portion of the indebtedness decreases uniformly by the amount of the monthly installment paid, shall not exceed the rates ("prima facie" rates) set forth in subsections (a) and (b) of this section. Subsections (c), (d) and (e) of this section prescribe the corresponding "prima facie" premium rates for other types of credit health insurance benefits. The prima facie premium rates are as follows: (a) As set forth in Tables 1 and 2, if premiums are payable on a single premium basis for the duration of the coverage; (b) As set forth in Tables 1 and 2, if premiums are payable on a monthly outstanding insured indebtedness basis for a closed-end loan; (c) The actuarial equivalent of the rates specified in subsections (a) and (b) of this section, if the coverage provided is a constant maximum indemnity for a given period of time; (d) An appropriate combination of the premium rate for a constant maximum indemnity for a given period of time and the premium rate for a maximum indemnity which decreases in even amounts per month, if the coverage provided starts as a constant maximum indemnity for a given period of time after which the maximum indemnity begins to decrease in even amounts per month; (e) For credit health insurance on an open-end credit account, per $1,000 of outstanding insured indebtedness, the following rates shall apply to the following minimum benefit plans: (A) 14-day nonretroactive plan — $1.66–$1.49 if underwritten; (B) 30-day nonretroactive plan — $1.40–$1.26 if underwritten; (C) 14-day retroactive plan — $1.89–$1.70 if underwritten; (D) 30-day retroactive plan — $1.74–$1.57 if underwritten; (f) For other benefits, except for benefits described in section (2)(g) of this rule, rates shall be actuarially consistent with the rates specified in this section; (g) For critical period credit health coverage, maximum rates shall be computed by using the conversion ratios based on the 1974 Basic Tables of Credit A & H Claim Costs published by National Association of Insurance Commissioners, NAIC Proceedings, 1975 Volume 1, pp. 676–691, and the extension as published in 1970 Volume 1, pp. 332–333. The factors are published in Exhibit 2. (2) The premium rates in section (1) of this rule shall apply to credit health insurance policies issued without underwriting or with underwriting for conditions with a high potential of resulting in permanent disablement, and offered to all eligible debtors. Such policies: (a) Shall not contain a provision excluding or denying a claim for disability resulting from preexisting conditions except for those conditions for which the insured debtor received medical diagnosis or treatment within six months preceding the effective date of the debtor's coverage and which caused loss that commences within six months immediately following the effective date of coverage. For purposes of this subsection: (A) Except as provided in paragraph (B) of this subsection, the effective date of insurance coverage applicable to an indebtedness is the date on which the individual policy or certificate of coverage was first issued; and (B) An individual policy for an open-end plan or a certificate of coverage under a group policy for an open-end plan may provide that the effective date of coverage of a specific advance or charge, for the amount in excess of the first $3,000 of account balance, is the date of the specific advance or charge; (b) Shall not contain any other provision that excludes or restricts liability in the event of disability caused in a specified manner, except that the policy may contain provisions excluding or restricting coverage in the event of normal pregnancy and intentionally self-inflicted injuries; (c) May contain an "actively at work test" only if the test applies solely when coverage is issued. Such a test shall not require that the debtor be employed more than 30 hours per week or deny coverage because the debtor is unemployed solely due to seasonal layoff; (d) Shall not contain age restrictions other than age restrictions only making ineligible for coverage debtors 66 or over at the time the indebtedness is incurred and may provide that all insurance will terminate upon attainment by the debtor of a specified age not less than 66 years; (e) Shall contain a daily benefit equal in amount to one-thirtieth of the monthly benefit payable under the policy for the indebtedness; (f) Shall contain a definition of "disability" providing that during the first 18 months of disability the insured shall be unable to perform the duties of the insured's occupation at the time the disability occurred, and thereafter the duties of any occupation for which the insured is reasonably fitted by education, training, or experience. This subsection shall not apply to lump-sum disability coverage; (g) May contain other additional benefits to policyholders and their debtors, such as dismemberment, partial disability and other benefits of small economic value to the consumer, but an insurer shall not pass on the charge for such coverage to the debtor so as to increase the total rate to exceed the rate established by this rule; and (h) Shall not contain a requirement of regular physician care unless the care is medically necessary for determination of continued disability. (3) The rates under section (1)(e) of this rule may be used as a composite rate for a benefit pay-off duration not to exceed 48 months. The percentage of monthly benefit must include accruing interest and charges. For durations greater than 48 months, rates filed must include actuarial development and adjustments consistent with this basis. [ED. NOTE: Exhibits and Tables referenced are available from the agency.] [Publications: Publications referenced are available from the agency.]