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 providing coverage for the outstanding amount of insured indebtedness in connection with a loan repayable in 12 equal monthly installments, when the prima facie loss ratio exceeds 58 percent, the rate shall be determined by the formula: ((Prima Facie Loss Ratio - .55) × 1.41 + 1) × Prima Facie Rate. For terms other than 12 months under single premium decreasing term credit life policies, and for other modes of premium payment under decreasing term credit life insurance, this formula shall be the basis of determining actuarially consistent rates.

C. Level Term Credit Life Insurance. On policies of level term credit life insurance for which a single premium is charged in advance providing a level amount of life insurance coverage for 12 months, when the prima facie loss ratio exceeds 58 percent, the rate shall be determined by the formula: ((Prima Facie Loss Ratio - 0.55) × 1.41 + 1) × Prima Facie Rate. For terms other than 12 months under single premium level term credit life policies and for other modes of premium payment under level term credit life insurance, this formula shall be the basis of determining actuarially consistent rates.

D. Outstanding Balance Credit Life Insurance. On policies of outstanding balance credit life insurance for which an insurance premium is charged each month based on the insured loan amount then outstanding, where the prima facie loss ratio exceeds 58 percent, the rate shall be determined by the formula: ((Prima Facie Loss Ratio - 0.55) × 1.41 + 1) × Prima Facie Rate.

E. Credit Health Insurance. On policies of credit health insurance for which the prima facie loss ratio exceeds 58 percent, the rate shall be determined by the formula: ((Prima Facie Loss Ratio - 0.55) × 1.41 + 1) × Prima Facie Rate.

F. Rounding Rate Calculations. Premium rates for credit life insurance or credit health insurance determined under this regulation shall be rounded to:

(1) Two decimal places per hundred dollars of initial amount of single premium insurance; and

(2) Three decimal places per thousand dollars of monthly outstanding balance insurance.