Purposes

Purposes Mississippi Code of 1972, Annotated, Title 83, Chapter 53, Section 25(1) provides that “no one shall pay, accrue, credit or otherwise allow, either directly or indirectly, any compensation to any creditor, person, partnership, corporation, association or other entity in connection with any policy, certificate or other contract of credit life insurance or credit disability insurance which exceeds forty-five percent (45%) of the premium rates approved for such policy, certificate or contract.” Mississippi Code of 1972, Annotated, Title 83, Chapter 53, Section 25(2) defines “compensation” as including, but not limited to, all of the following: A. Commission, fees, and expense allowances; B. The fair market value of all equipment, calculators, goods and service; C. The fair market value of benefits such as travel, vacations or other rewards of any kind; and, D. All other accruals, payments and other compensation or expenditures in any form whatsoever. Mississippi Code of 1972, Annotated, Title 83, Chapter 53, Section 25(3) establishes certain limited exceptions to the definition of “compensation” set out in Mississippi Code of 1972, Annotated, Title 83, Chapter 53, Section 25(2). The Commissioner has determined that not all payments being made under the guise of Mississippi Code of 1972, Annotated, Title 83, Chapter 53, Section 25(2) and (3) are permitted pursuant to those sections. The Commissioner has also determined that the use of compensating balances or the deposit of monies into non-interest bearing accounts with creditors in connection with a credit life and/or credit disability insurance program, either directly or indirectly, is in violation of Mississippi Code of 1972, Annotated, Title 83, Chapter 53, Section 35(d) and Mississippi Code of 1972, Annotated, Title 83, Chapter 53, Section 25(2) and (3). The purpose of this Regulation is to regulate certain activities and methods under which the credit insurance business within the State of Mississippi is written and to eliminate certain devices and plans designed to avoid or render ineffective the provisions of Title 83, Chapter 53, Section 1 through 47, Mississippi Code of 1972, Annotated and other pertinent statutes. The specific purposes of this Regulation are to regulate corporate allocations with respect to stock or other equity interests in credit insurers or credit insurance holding companies and their affiliates and to regulate compensating balances or other low or non-interest bearing accounts on deposit with creditors, thereby prohibiting methods and devices designed to avoid or render ineffective the provisions of Mississippi Code of 1972, Annotated, Title 83, Chapter 53, Section 25 and Mississippi Code of 1972, Annotated, Title 83, Chapter 53, Section 27 relating to the payment of compensation with respect to credit insurance.