Hawaii Administrative Rules › Title 16 - DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS › Chapter 6 - CREDIT LIFE AND CREDIT DISABILITY INSURANCE › Subchapter 3 - PREMIUMS, RATE DEVIATIONS, REFUNDS, AND COLLECTION AND REMITTANCE OF PREMIUMS › Section 16-6-12 - Credit disability insurance premium rates

Current through June, 2024
(a) If
				premiums are paid in one sum for the entire duration of the indebtedness, the
				rates for $100 of initial insured indebtedness repayable in equal installments
				as shown in the exhibit entitled "Credit Disability Insurance Premium Rates,"
				dated July 1, 1988, located at the end of this chapter and which is made a part
				of this section, shall be deemed reasonable in relation to the benefits
				provided. Premium rates for all indebtedness repayable in installments shall be
				consistent with the rates in the exhibit entitled "Credit Disability Insurance
				Premium Rates," dated July 1, 1988, located at the end of this
				chapter.
(b) If premiums are paid
				on the basis of a premium per month per $1,000 of outstanding indebtedness,
				these premiums shall be computed according to the following formula:
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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.
(c) The actuarial equivalent of sections
				16-6-11 and 16-6-12 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 period is a combination of
				a constant maximum indemnity for a given period of time after which the maximum
				indemnity begins to decrease in even amounts per month.
(e) The actuarial equivalent of the rates in
				subsections (a), (b), (c) and (d) if the benefits provided are other than those
				described in these four subsections.
(f) The outstanding balance rate for credit
				disability insurance, unlike credit life insurance, varies by term (months).
				Because of this, it is difficult or impossible to compute a single maximum
				outstanding balance rate applicable to all loans made under an open-end or
				revolving credit plan. If the term of the loan is clearly defined, an
				appropriate rate or rates can be computed. However, this is not the case in
				most revolving credit situations.
(g) The premium rates specified in the table
				at the end of this chapter are considered reasonable for policies which:
(1) Do not contain any exclusions except
				disabilities resulting from intentional self-inflicted injury, pregnancy,
				foreign residence, flights in non-scheduled aircraft, and pre-existing illness,
				disease or physical condition for which the debtor received or was
				professionally advised to obtain medical advice, consultations or treatment
				during the six-month period preceding the effective date of the debtor's
				coverage and which caused disabilities within the six months following the
				effective date of coverage.
(2) Do
				not contain any age restrictions, or only age restrictions making ineligible
				for coverage those debtors sixty-five or over at the time the indebtedness is
				incurred, or debtors who will have attained age sixty-six or over on the
				maturity date of the indebtedness.
(3) May condition coverage on the debtor's
				being in active employment at the time the indebtedness is incurred.
(4) Provide for a daily benefit equal in
				amount to one-thirtieth of the scheduled monthly payments on the
				indebtedness.
(5) Contain a
				definition of "disability" which provides coverage during the initial twelve
				months of disability even though the insured is able to perform an occupation
				other than the one he held at the time disability occurred, except this
				paragraph shall not apply to lump sum disability coverage.