Credit Life and Accident and Sickness Rates

PURPOSE: This rule implements the prima facie rates for credit life and credit accident and health specified in section 385.070, RSMo. It also sets forth alternative conditions and rates which will be permitted for credit life insurance and credit accident and health insurance. (1) Regarding credit life insurance— (A) Premium rates for credit life insurance are presumed reasonable if consistent with the rates set forth in section 385.070.1(1), RSMo; and (B) If the credit life insurance policy is of a type different than those described in subsection (1)(A), premium rates for this policy may be determined to be reasonable if they are actuarially consistent with the rates set forth in subsection (1)(A). (2) Regarding credit accident and sickness insurance— (A) Premium rates for credit accident and sickness insurance are presumed reasonable if consistent with the schedule stated in section 385.070.1(2), RSMo or, if premiums are paid on the basis of a premium rate per month per thousand dollars of outstanding insured indebtedness, if premium rates are computed according to the following formula, or according to a formula, approved by the director which produces rates actuarially equivalent to the single premium rates: Opn = 20 Spn n+1 Where Spn = Single Premium Rate per $100 of initial insured indebtedness repayable in n equal monthly installments; Opn = Monthly Outstanding Balance Premium Rate per $1,000; and n = Original repayment period, in months. (3) An insurer may receive approval of a different premium rate in accordance with section 385.070.1(6), RSMo. (4) Insurers may use the same application forms under this rule whether or not underwriting questions are asked. The department will presume that any application form for which all the relevant underwriting questions have been left unanswered represents a policy which has not been underwritten, and for which prima facie rates are permissible. A form for which any relevant underwriting questions have been answered or filled in represents a policy for which premium increases or decreases are required. Insurers should maintain in their files their rules for those circumstances where underwriting questions are asked. These rules shall be communicated to and followed by the insurer’s agents or other producers. AUTHORITY: sections 374.045, 385.045, and 385.070, RSMo 2016.* This rule was previously filed as 4 CSR 190-13.190. Original rule filed June 12, 1981, effective Oct. 16, 1981. Amended: Filed Nov. 2, 1993, effective July 10, 1994. Amended: Filed July 12, 2002, effective Feb. 28, 2003. Amended: Filed Dec. 13, 2018, effective July 30, 2019. *Original authority: 374.045, RSMo 1967, amended 1993, 1995, 2008; 385.045, RSMo 1977, amended 1981, 1995; and 385.070, RSMo 1977, amended 1983, 1991, 1992.