Code of Maine Rules › 02 - DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION › 031 - BUREAU OF INSURANCE › Chapter 220 - CREDIT LIFE AND HEALTH INSURANCE › Section 031-220-10 - Prima Facie Credit Accident and Health Insurance Rates

Current through 2024-29, July 17, 2024
Credit accident and health 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 rates per $100 of initial insured indebtedness in connection
				with closed-end transactions, or open-end transactions for which the number and
				amount of payments is fixed, are:
Term of Indebtedness* in months
Non-Retroactive 30-Day Elimination Period
Retroactive 30-Day Waiting Period
Rate
Benchmark Loss Ratio
Rate
Benchmark Loss Ratio
6
0.93
50
1.70
59
12
1.46
55
2.11
67
18
1.75
60
2.43
70
24
1.96
64
2.69
72
30
2.14
67
2.94
73
36
2.31
69
3.15
74
42
2.48
70
3.32
75
48
2.63
71
3.48
76
54
2.77
72
3.61
77
60
2.89
73
3.73
78
72
3.12
74
3.92
80
84
3.32
75
4.17
80
96
3.48
76
4.38
80
108
3.61
77
4.57
80
120
3.71
78
4.73
80
132
3.80
79
4.88
80
144
3.87
80
5.00
80
156
3.97
80
5.11
80
168
4.05
80
5.20
80
180
4.13
80
5.27
80
* For truncated coverage, use the term of insurance.
For terms of indebtedness other than those shown, linear
				  interpolation shall be used.
B. Prima facie monthly premium rates per
				$1,000 of outstanding indebtedness which are the actuarial equivalent of the
				prima facie single premium rates shall be computed by the following formula:
OBn = SPn
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				  Image
Gn
where OBn is the monthly premium per
				  $1,000 of outstanding indebtedness;
SPn is the single premium rate per
				  $100 of initial indebtedness;
n is the number of monthly payments; and
Gn = 1 + .0425 n/2 is an interest
				  adjustment. Use of this adjustment
is optional.
C. Prima facie monthly premium rates per
				$1,000 of outstanding principal balance shall be computed as follows:
(1) For closed-end indebtedness or open-end
				indebtedness for which the number and amounts of payments is fixed, rates which
				are the actuarial equivalents of the prima facie single premium rates shall be
				computed by the following formula:
OPn = SPn
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				  Image
Gn
where OP is the monthly premium per $1,000 of outstanding
				  principal balance;
i
is the monthly finance rate;
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				  here to view Image
; and
SPn, n and Gn
				  are as defined in subsection B above.
(2) For revolving accounts, rates which are
				the actuarial equivalent of the prima facie single premium rates shall be
				computed by the following formula:
OPn = 10
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				  Image
where OP is the monthly premium per $1,000 of outstanding
				  principal balance;
MB is the monthly benefit to be paid when the debtor is
				  disabled
PB is the outstanding principal balance;
n is the maximum number of monthly benefit payments
SPn is the defined in subsection B
				  above; and
LRn is the benchmark loss
				  ratio.
The following are special cases of this formula:
(a) When the monthly benefit is 1/n of the
				outstanding balance at time of disability:
OPn =
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				  Image
[(n) (SPn) - (n-1) (
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				  Image
) (
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				  Image
)]
(b) When
				the monthly benefit is the amount necessary to pay off the indebtedness at time
				of disability in n months:
OPn =
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				  Image
- [(n) (SPn) - (n-1) (
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				  Image
)(
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)]