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31.13.01.00.htm 31.13.01.00. Title 31 MARYLAND INSURANCE ADMINISTRATION Subtitle 13 CREDIT LIFE AND CREDIT HEALTH INSURANCE Chapter 01 Standards for Credit Life and Credit Health Insurance Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland
31.13.01.01.htm 31.13.01.01. 01 Purpose.. The purpose of this chapter is to:. A. Establish standards for premium rates for credit life and credit health insurance which are neither excessive nor inadequate in relation to benefits, giving due consideration to past and expected loss experience within and outside of this State, to underwriting practice and judgement, to past and prospective expense factors, to a reasonable margin for profit and contingencies, and to other releB. Regulate certain other
31.13.01.02.htm 31.13.01.02. 02 Regulation of Commissions.. To assure that credit life and credit health insurance operations of insurers do not result in rates which are excessive in relation to benefits, do not endanger the solvency of insurers rendering their transaction of business hazardous to policyholders or the public, and do not adversely affect other classes of business of insurers, the Commissioner has found it necessary to establish maximum rates of commission which may be paid to agents or br
31.13.01.03.htm 31.13.01.03. 03 Applicability.. This chapter applies to all authorized life insurers and all authorized health insurers delivering or issuing for delivery or proposing to deliver or issue for delivery credit life insurance or credit health insurance in Maryland under individual policies, group policies, or group certificates which are required to be filed in accordance with the provisions of Insurance Article, §13-110, Annotated Code of Maryland.
31.13.01.04.htm 31.13.01.04. 04 Definitions.. A. In this chapter the following terms have the meanings indicated.. B. Terms Defined.. 1) "Account" means the coverage for a single plan of benefits for either credit life insurance or credit health insurance under one premium payment method offered to a single class of business in Maryland by one creditor whether written on a group or individual basis, or both.2) "Advance loan payment" means the payment of a scheduled loan installment before the installment's
31.13.01.05.htm 31.13.01.05. 05 Loss Ratio.. Benefits for policies issued under these regulations shall be deemed reasonable in relation to premiums if claims incurred under the policies result in, or may reasonably be expected to result in, a loss ratio of not less than 55 percent when premiums do not exceed prima facie premium rates. When the prima facie loss ratio exceeds 55 percent, the premiums shall be determined in accordance with the methods of Regulation .18 of this chapter.
31.13.01.06.htm 31.13.01.06. 06 Statistics and Reporting Forms.. A. Filing with Commissioner.. 1) To permit the Commissioner to review the basis of prima facie premium rates and the basis of premium rates being charged on the case method, each insurer writing credit life or credit health insurance shall:a) Maintain statistics relating to the insurer's Maryland business; and. b) File the statistics with the Commissioner in the form required by the Commissioner..
31.13.01.07.htm 31.13.01.07. 07 Rate Changes and Creditor-Paid Insurance.. A. Premium rates under a group policy of credit life or credit health insurance may not be increased more than once during the first policy year, and a subsequent increased rate may not be charged within 12 months of any prior change in rates.B. In a policy of outstanding balance insurance, a change in rates may not be made effective until 31 days after all existing debtors in the group have been notified of any in
31.13.01.08.htm 31.13.01.08. 08 Premium Rates by Case Method.. A. Vacant.. B. Vacant.. C. Case Comprised of Two or More Accounts.. 1) If an insurer has combined two or more accounts to establish a case, it may not add additional accounts or remove accounts from that case except with the permission of the Commissioner and under conditions which the Commissioner may specify.2) When submitting an experience report for a case comprised of two or more accounts, the insurer shall include a list of the
31.13.01.09.htm 31.13.01.09. 09 General Premium Rate Standards and Increased Rates.. A. With respect to all premium rates not eligible for filing in accordance with the case method, the Commissioner will accept as meeting the standards of Insurance Article, §13-110(b)1) and (2) Annotated Code of Maryland, those premium rate filings which do not exceed prima facie premium rates stated in Regulations .10―11 and .14―15 of this chapter for the several categories of insurance described in those regulations. Th
31.13.01.10.htm 31.13.01.10. 10 Prima Facie Premium Rates for Credit Life Insurance.. A. Except as specified in Regulation .11 of this chapter, the premiums charged for credit life insurance policies having all policy provisions not less favorable to the insured debtor than those permitted by Regulation .13 of this chapter, may not exceed the following:1) For single premium decreasing term policies insuring one life, issued on the total-of-payments method, $0.43 per annum per $100 of initial amount o
31.13.01.11.htm 31.13.01.11. 11 Prima Facie Premium Rates―Credit Life Insurance―Net Payoff Balance Method.. A. The premium charged for credit life insurance policies issued under the net payoff balance method and having all policy provisions not less favorable to the insured debtor than those permitted by Regulation .13 of this chapter, may not exceed the following:1) For single premium decreasing term policies insuring one life, a premium based on $0.66 per $1,000 of the sum of the sched
31.13.01.12.htm 31.13.01.12. 12 Repealed..
31.13.01.13.htm 31.13.01.13. 13 Underwriting Requirements for Credit Life Prima Facie Premium Rates.. A. The prima facie premium rates used in Regulations 10―11 of this chapter assume that contracts providing credit life insurance do not require evidence of individual insurability from any eligible debtor electing to purchase coverage within 30 days of the date the debtor becomes eligible.B. If an insurer requires evidence of insurability from debtors electing to purchase coverage within
31.13.01.14.htm 31.13.01.14. 14 Disability Benefit Provisions.. A. If a credit life insurance policy, otherwise meeting the requirements of Regulation .13 of this chapter provides for payment of the policy proceeds in the event of the loss of two limbs or in the event of the complete loss of eyesight, the insurer may charge a rate not to exceed 1 percent more than the rates in Regulation .10 or .11 of this chapter, whichever is applicable. If the policy provides for payment of the policy proceeds in event of
31.13.01.15.htm 31.13.01.15. 15 Prima Facie Premium Rates for Credit Health Insurance.. A. The premiums charged for credit health insurance policies having all policy provisions not less favorable to the insured debtor than those required by Regulation .17 of this chapter may not exceed, on policies of credit health insurance for which a single premium is charged in advance for the entire duration of the insurance and the indebtedness is repayable in equal installments, the amount shown in the table below fo
31.13.01.16.htm 31.13.01.16. 16 Repealed..
31.13.01.17.htm 31.13.01.17. 17 Underwriting Requirements for Credit Health Prima Facie Premium Rates.. A. The prima facie premium rates in Regulation .15 of this chapter assume that contracts providing credit health insurance do not require evidence of individual insurability from any eligible debtor electing to purchase coverage within 30 days of the date the debtor becomes eligible.B. If an insurer requires evidence of insurability from debtors electing to purchase coverage within 30 days of the date they
31.13.01.18.htm 31.13.01.18. 18 Guidelines for Increased Rates.. A. Applications to the Commissioner for higher than prima facie premium rates shall be accompanied by credible statistics. Approval of applications for increased rates will depend on whether the requested rates are not greater than rates based on the standards in this regulation.B. Decreasing Term Credit Life Insurance. On policies of decreasing term credit life insurance for which a single premium is charged in advance provid
31.13.01.19.htm 31.13.01.19. 19 Refunds.. A. In event of termination of the insurance before the scheduled maturity date of the indebtedness, other than by performance of the insurance contract, the insurer shall promptly refund or credit to the person entitled to it the appropriate portion of any premiums paid for the insurance.B. In the case of decreasing term credit life insurance or of credit health insurance on which premiums are charged to the debtor other than as a single premium payable in adv
31.13.01.20.htm 31.13.01.20. 20 Commission to Agents and Creditors.. A. Maximum Commission.. 1) On all loans originating in Maryland, an insurer may not directly or indirectly pay, allow, or offer to pay any form of commission, as defined in Regulation .04B(6) of this chapter, in excess of the limits stated in these regulations on a form of credit life or credit health insurance regardless of whether the payment is made to a licensed agent, a creditor, or an affiliate, corporate parent, s
31.13.01.21.htm 31.13.01.21. 21 Reinsurance Treaties.. A. To permit the Commissioner to enforce the provisions of Regulation .20 of this chapter with respect to that portion of commission defined by Regulation .04B(6)n) of this chapter and to permit the Commissioner to ascertain that there are no violations of Insurance Article, Title 27, Annotated Code of Maryland, and other applicable sections of Insurance Article, Annotated Code of Maryland, a contract of reinsurance of credit life or credit healt
31.13.01.22.htm 31.13.01.22. 22 Prohibited Transactions.. A. A person may not solicit or sell a group or individual policy of credit life or credit health insurance unless the person is then licensed as an agent in accordance with Insurance Article, Title 10, Subtitle 1, Annotated Code of Maryland. A person possessing a restricted license in accordance with Insurance Article, §10-105(e)2)i) Annotated Code of Maryland, shall be deemed appropriately licensed for this purpose.1) An enroller may not re
31.13.01.23.htm 31.13.01.23. 23 Combinations of Coverages.. A. In General.. 1) If an individual policy of credit life insurance or a certificate of group credit life insurance is used to provide more than one type of coverage, the policy or certificate shall include, for each type of coverage, a box that is:a) Prominently placed in the schedule of benefits; and. b) Clearly and prominently labeled with the name of the type of coverage.. 2) Before an insurer issues an individual policy of credit life insurance o
31.13.01.24.htm 31.13.01.24. 24 Notice to Debtors.. A. If a debtor is covered by a group credit life or credit health insurance policy providing for payment of premiums to the insurer on a monthly outstanding balance basis, the policy shall provide that in the event of termination of the policy for any reason the insured debtor shall be given written notice of termination, and that coverage will continue for at least 31 days from the date of notice, except when replacement of the coverage by the s
31.13.01.25.htm 31.13.01.25. 25 Benefits.. A. When a debtor has filed in accordance with the policy provisions a claim for benefits for which the insurer is liable under a credit health insurance policy, the insurer shall pay any late charges accruing on the amount payable under the claim after the date the claim has been filed.B. The amount of the claim payable under a credit life insurance policy shall be determined as of the date of death of the debtor or in the case of benefits described in Regul
31.13.01.26.htm 31.13.01.26. 26 Review of Credit Operations.. A. Every insurer transacting credit life or credit health insurance in Maryland shall conduct a review of each of its creditor accounts with respect to the credit life and credit health insurance business of the creditor to assure compliance with the insurance laws and regulations of Maryland. Unless a satisfactory review has been made within 2 years before the effective date of these regulations, the first review shall be made not later than 15
31.13.01.27.htm 31.13.01.27. 27 Effective Date.. This chapter shall take effect September 1, 1980. An individual policy or group policy or group certificate of credit life or credit health insurance not in conformity with this chapter may not be issued or continued to be used in connection with any loan made on or after the effective date of this chapter. A premium in excess of that permitted by these regulations may not be charged for credit life or credit health insurance, and a commission or
31.13.01.28.htm 31.13.01.28. 28 Clerical Errors.. A. Excess Insurance.. 1) If a policy of credit life or credit health insurance limits the life or health insurance benefits to stated policy maximums, the policy and certificates of insurance issued under a group policy shall provide that if the insured has been charged premiums for insurance in excess of the stated maximums the insurer may terminate the excess insurance and refund all premiums paid by the debtor for the excess insurance.
31.13.01.29.htm 31.13.01.29. 29 Change of Insurers ― Reporting Requirements ― Coverage and Rates.. A. Insurers That Cease to Offer Credit Insurance. Within 90 days after an insurer ceases to offer credit insurance through a case, the insurer shall notify the Commissioner of:1) The name of the creditor;. 2) Each coverage no longer offered;. 3) he date on which the coverage ceased to be offered; and. 4) The current approved premium rate applicable to each coverage no longer offered..
31.13.01.9999.htm 31.13.01.9999. Administrative History Effective date: January 1, 1978 (4:25 Md. R. 1940). Chapter revised at 7:11 Md. R. 1035. Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345) adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139). Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914).
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