Arizona Administrative Code › Title 20 - COMMERCE, FINANCIAL INSTITUTIONS, AND INSURANCE › Chapter 06 - DEPARTMENT OF INSURANCE AND FINANCIAL INSTITUTIONS - INSURANCE DIVISION › Article 6 - TYPES OF INSURANCE CONTRACTS › Section R20-6-604 - Consumer Credit Insurance; Definitions

Current through Register Vol. 30, No. 28, July 12, 2024
The definitions in A.R.S. §
									20-1603 and this Section apply to
				  R20-6-604 through
				  R20-6-604.10.
1. "Actual loss ratio" means incurred claims
				divided by earned premiums at rates in use.
2. "Actuarially equivalent" means of equal
				actuarial present value determined as of a given date with each value based on
				the same set of actuarial assumptions. When used in this Article in reference
				to rates and coverage, "actuarially equivalent" means a rate or coverage that
				is actuarially determined to yield loss ratios of 50% for credit life insurance
				and 60% for credit disability insurance.
3. "Credit insurance" means credit life
				insurance, credit disability insurance, or both, but does not include any
				insurance for which there is no identifiable charge.
4. "Earned premiums" means earned premiums at
				prima facie rates and earned premiums at rates in use.
5. "Earned premiums at prima facie rates"
				means an insurer's actual earned premiums, adjusted to the amount that the
				insurer would have earned if the insurer's premium rates had equaled the prima
				facie rates in effect during the experience period.
6. "Earned premiums at rates in use" means
				the premiums that an insurer actually earns on the premium rates the insurer
				charges during an experience period.
7. "Evidence of individual insurability"
				means information about a debtor's health status or medical history that a
				debtor provides as a condition of credit insurance becoming
				effective.
8. "Experience" means an
				insurer's earned premiums and incurred claims during an experience
				period.
9. "Experience period"
				means a period of time for which an insurer reports income and expense
				information on the insurer's credit insurance business.
10. "Final adjusted rates" means the prima
				facie rates referred to in
				R20-6-604.04 and
				R20-6-604.05, subject to any
				deviations approved under
				R20-6-604.08.
11. "Incurred claims" means the total claims
				an insurer pays during an experience period, adjusted for the change in the
				claim reserves.
12. "Plan of credit
				insurance" means an insurance plan based on one of the following rate and
				coverage categories:
a. Credit life
				insurance, other than on revolving accounts, including joint and single life
				coverage, decreasing and level insurance, and outstanding balance and single
				premium;
b. Credit life insurance
				on revolving accounts;
c. Credit
				life insurance on an age-graded basis;
d. Credit disability insurance, other than on
				revolving accounts, including outstanding balance and single premium, and each
				combination of waiting period and retroactive or non-retroactive
				benefits;
e. Credit disability
				insurance on revolving accounts, including each combination of waiting period
				and retroactive or non-retroactive benefits.