Mississippi Administrative Code › Title 19 - Department of Insurance › Part 1 - General › Chapter 18 - (89-105) Regulation of Corporation Allocations With Respect to Credit Insurers and Certain Insurance Holding Companies and Bank Deposits › Rule 19-1-18.02 - Purposes

Current through June 25, 2024
Mississippi Code of 1972, Annotated
,
				  Title 83, Chapter 53, Section 25(1) provides that "no one shall pay, accrue,
				  credit or otherwise allow, either directly or indirectly, any compensation to
				  any creditor, person, partnership, corporation, association or other entity in
				  connection with any policy, certificate or other contract of credit life
				  insurance or credit disability insurance which exceeds forty-five percent (45%)
				  of the premium rates approved for such policy, certificate or contract."
Mississippi Code of 1972, Annotated
,
				  Title 83, Chapter 53, Section 25(2) defines "compensation" as including, but
				  not limited to, all of the following:
A. Commission, fees, and expense
				allowances;
B. The fair market
				value of all equipment, calculators, goods and service;
C. The fair market value of benefits such as
				travel, vacations or other rewards of any kind; and,
D. All other accruals, payments and other
				compensation or expenditures in any form whatsoever.
Mississippi Code of 1972, Annotated
,
				  Title 83, Chapter 53, Section 25(3) establishes certain limited exceptions to
				  the definition of "compensation" set out in
Mississippi Code of
				  1972, Annotated
, Title 83, Chapter 53, Section 25(2).
The Commissioner has determined that not all payments being
				  made under the guise of
Mississippi Code of 1972,
				  Annotated
, Title 83, Chapter 53, Section 25(2) and (3) are
				  permitted pursuant to those sections.
The Commissioner has also determined that the use of
				  compensating balances or the deposit of monies into non-interest bearing
				  accounts with creditors in connection with a credit life and/or credit
				  disability insurance program, either directly or indirectly, is in violation of
Mississippi Code of 1972, Annotated
, Title 83, Chapter
				  53, Section 35(d) and
Mississippi Code of 1972,
				  Annotated
, Title 83, Chapter 53, Section 25(2) and (3).
The purpose of this Regulation is to regulate certain
				  activities and methods under which the credit insurance business within the
				  State of Mississippi is written and to eliminate certain devices and plans
				  designed to avoid or render ineffective the provisions of Title 83, Chapter 53,
				  Section 1 through 47,
Mississippi Code of 1972,
				  Annotated
and other pertinent statutes. The specific purposes of
				  this Regulation are to regulate corporate allocations with respect to stock or
				  other equity interests in credit insurers or credit insurance holding companies
				  and their affiliates and to regulate compensating balances or other low or
				  non-interest bearing accounts on deposit with creditors, thereby prohibiting
				  methods and devices designed to avoid or render ineffective the provisions of
Mississippi Code of 1972, Annotated
, Title 83, Chapter
				  53, Section 25 and
Mississippi Code of 1972,
				  Annotated
, Title 83, Chapter 53, Section 27 relating to the
				  payment of compensation with respect to credit insurance.
Miss. Code Ann. §
										83-53-29
				  (Rev. 2011)