Code of Maine Rules › 02 - DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION › 031 - BUREAU OF INSURANCE › Chapter 220 - CREDIT LIFE AND HEALTH INSURANCE › Section 031-220-9 - Prima Facie Credit Life Insurance Rates

Current through 2024-29, July 17, 2024
Credit life insurance benefits provided in connection with
				  forms filed in accordance with Title 24-A M.R.S.A., Section2858, and this Rule
				  shall be deemed prima facie reasonable in relation to the premiums charged if
				  the schedule of premium rates filed with such forms does not exceed the premium
				  rate standard set forth below.
A. In
				the absence of an approved rate deviation, the prima facie single life monthly
				premium rate per $1,000 of outstanding balance is $.50 and the prima facie
				joint life monthly premium rate per $1,000 of outstanding balance is
				$.84.
B. Prima facie single premium
				rates per dollar of total note for monthly payment indebtedness which are the
				actuarial equivalents of the prima facie monthly rate shall be computed by the
				following formula:
SPn =
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(OP) (Fn)
where: SPn is the credit life single premium rate per $1.00
				  of total note;
n is the number of monthly payments;
i is the monthly finance rate;
a
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OP is the monthly credit life rate per $1.00 of insured
				  amount; and
Fn = discount factor for interest and mortality
=
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(1) When
				an upward or downward deviation applies, single premium and single charge rates
				equivalent to the deviated rate are to be computed with the deviated rate
				substituted for the prima facie rate of $.50 or $.84.
(2) Prima facie single premium rates for
				one-payment indebtedness shall be computed by the following formula:
bSPn = (a
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)(OP) (bFn)
where: 
				  bSPn is the credit life single premium
				  rate per $1.00 of a single payment in n months;
bFn =
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; and
a
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and OP are as defined above.
(3) Prima facie single premium rates for
				monthly payment indebtedness where coverage is to be provided for a period
				shorter than the full term of indebtedness (truncated coverage) shall be
				computed by the following formula:
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where: SPm,n is the credit life single premium rate per $1.00
				  of total note;
m is the number of months for which coverage is to be
				  provided; and
n, a
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, i, OP, and Fn are as defined above.
(4) Prima facie single premium rates per
				dollar of amount financed for monthly payment indebtedness shall be computed as
				follows:
a. Rates which are the actuarial
				equivalent of the prima facie monthly rate shall be computed by the following
				formula:
SP'n =
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(OP) (Fn)
where SP'n is the credit life single premium rate per $1.00
				  of outstanding principal balance and all other terms are as defined above.
b. At the insurer's
				option, the following approximation may be used for an account instead of the
				rates which result from the formula in (a) above:
SP'n =
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(5) Prima facie single premium rates for
				other variations shall be actuarially consistent with the above rates.