Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 3 - LIFE, ACCIDENT, AND HEALTH INSURANCE AND ANNUITIES › Subchapter FF - CREDIT LIFE AND CREDIT ACCIDENT AND HEALTH INSURANCE › Division 5 - STANDARDS OF BENEFITS FOR CREDIT ACCIDENT AND HEALTH INSURANCE › Section 3.5501 - Standards and Principles for the Application of the Rates

Current through Reg. 49, No. 28; July 12, 2024
The standards and principles for the application of
						presumptive rates established for credit accident and health insurance are as
						follows.
(1) The initial amount of
					 insured indebtedness to which the rate is applied shall not exceed the
					 aggregate of the insured portion of the periodic scheduled unpaid installments
					 of the indebtedness.
(2) The
					 indebtedness must be repayable in substantially equal monthly or other periodic
					 installments during the period of coverage.
(3) The credit accident and health insurance
					 contract may require written and signed evidence of insurability (inclusive of
					 age and gainful employment) and where offered, shall be offered to all eligible
					 debtors, and shall contain:
(A) no provisions
					 excluding or denying a claim for disability resulting form pre-existing
					 conditions except for those conditions for which the insured debtor received
					 medical diagnosis or treatment within the six months immediately preceding the
					 effective date of the debtor's coverage and which caused a period of loss
					 within six months following the effective date of coverage; provided, however,
					 that any subsequent period of disability resulting from such condition that
					 commences or recommences more than six months after the effective date of the
					 coverage shall be covered under the provision of the policy;
(B) no provision for validity of insurance
					 more restrictive than contestability based on material misrepresentation and no
					 other provision which excludes or restricts liability in the event of
					 disability caused in a specified manner except that it may contain provisions
					 excluding or restricting coverage in the event of:
(i) elective abortion;
(ii) normal pregnancy;
(iii) intentionally self-inflicted
					 injuries;
(iv) flight in
					 nonscheduled aircraft;
(v) foreign
					 travel or foreign residence; and
(vi) loss resulting from war or military
					 service. An insurer may not rely on material misrepresentation as a defense
					 against the payment of a claim unless the insurer required the insured to sign
					 a written statement in which the alleged material misrepresentation was
					 made;
(C) only age
					 restrictions making ineligible for coverage debtors 65 or over at the time the
					 indebtedness is incurred or debtors who will have attained age 66 or over on
					 the maturity date of the indebtedness;
(D) provision for a daily benefit equal in
					 amount to 1/30 (or other applicable fraction) of the scheduled monthly (or
					 other specified mode of installment) payments on the indebtedness;
					 and
(E) for the purpose of total
					 disability insurance, a definition of "total disability" which provides
					 coverage during the first 12 months of such disability even though the insured
					 is able to perform an occupation other than the one he held at the time such
					 disability occurred. During the first 12 months of such disability, the
					 definition of "total disability" must relate such disability to the inability
					 to perform the essential and customary duties of the occupation of the debtor
					 at the time the disability occurred. After such disability continues for more
					 than 12 months, the definition of "total disability" may relate such continuing
					 disability to the inability to perform any occupation for which the debtor is
					 reasonably fitted by education, training, or experience.