Credit accident and health insurance rates

1. Premium rate. Subject to the conditions and requirements in subsection 5 and section 45-07-01.1-10, the prima facie rates shown below are considered to meet the requirements of section 45-07-01.1-03 and may be used without filing additional actuarial support. a. If premiums are payable on a single premium basis for the duration of the coverage, the prima facie rate per one hundred dollars of initial insured debt for single accident and health insurance is as set forth in the table below (rates for monthly periods other than those listed shall be interpolated or extrapolated): Number of Equal Monthly Installments After Fourteenth Day of Disability, Retroactive to Fire Day of Disability After Fourteenth Day of Disability After Thirtieth Day of Disability, Retroactive to First Day of Disability After Thirtieth Day of Disability 6 $1.31 $.83 $1.05 $.55 12 1.88 1.30 1.51 .94 24 2.54 1.85 2.03 1.39 36 3.01 2.23 2.38 1.70 48 3.40 2.56 2.65 1.94 60 3.74 2.83 2.89 2.16 72 4.00 3.06 3.06 2.32 84 4.17 3.24 3.18 2.43 96 4.30 3.38 3.27 2.51 108 4.40 3.50 3.34 2.58 120 4.47 3.60 3.40 2.62 b. If premiums are paid on the basis of a premium rate per month per thousand of outstanding insured gross debt, these premiums shall be computed according to the following formula or according to a formula approved by the commissioner which produces rates actuarially consistent with the single premium rates in subdivision a of subsection 1: Where SPn = Single premium rate per one hundred dollars of initial insured debt repayable in n equal monthly installments as shown in subdivision a. OPn = Monthly outstanding balance premium rate per one thousand dollars. n = The number of months in the term of the insurance. dis = .0025, representing an annual discount rate of three percent for interest. c. If the coverage provided is a constant maximum indemnity for a given period of time, the actuarial equivalent of subdivisions a and b shall be used. d. If the coverage provided is a combination of a constant maximum indemnity for a given period of time after which the maximum indemnity begins to decrease in even amounts per month, an appropriate combination of the premium rate for a constant maximum indemnity for a given period of time and the premium rate for a maximum indemnity which decreases in even amounts per month shall be used. e. The outstanding balance rate for credit accident and health insurance may be either a term-specified rate or may be a single composite term outstanding balance rate. 2. Subject to the conditions and requirements in subsection 5 and section 45-07-01.1-10, the prima facie rates for credit accident and health insurance shown below are considered to meet the requirements of section 45-07-01.1-03 in the situation where the insurance is written on an open-end loan. These prima facie rates and the formulae used to calculate them may be used without filing additional actuarial support. Other formulae to convert from a closed-end credit rate to an open-end credit rate may be used if approved by the commissioner. a. If the maximum benefit of the insurance equals the net debt on the date of disability, the term of the loan is calculated according to the formula: 1/(minimum payment percent). The prima facie rate is determined by applying the calculated term to the rates shown in subsection 1. A composite minimum payment percentage may be used in place of the minimum payment percentage for a specific credit transaction. b. If the maximum benefit of the insurance equals the outstanding balance of the loan on the date of disability plus any interest accruing on that amount during disability, the term of the insurance (n) is estimated by using the following formula: where: i = interest rate on the account or a composite interest rate used for the type of policy; x = monthly payment per one thousand dollars of coverage consistent with the term calculated above; and v = 1/(1 + i). The calculated value of the term is used to look up an initial rate in subsection 1. The final prima facie rate is calculated by multiplying the initial rate by: the adjustment n/an where: n is the term calculated above; and n an = ( 1 - v )/i. 3. If the accident and health coverage is sold on a joint basis involving two people, the factor for calculating the rate is 1.8. 4. If the benefits provided are other than those described in subsection 1 or 2, rates for those benefits shall be actuarially consistent with rates provided in subsections 1 and 2. 5. The premium rates in subsection 1 shall apply to contracts providing credit accident and health insurance and that contain the provisions below: a. Coverage may be excluded for disabilities resulting from: (1) Normal pregnancy; (2) War or any act of war; (3) Elective surgery; (4) Intentionally self-inflicted injury; (5) Sickness or injury caused by or resulting from the use of alcoholic beverages or narcotics, including hallucinogens, unless they are administered on the advice of and taken as directed, by a licensed physician other than the insured; (6) Flight in any aircraft other than a commercial scheduled aircraft; or (7) A preexisting condition from which the insured debtor becomes disabled within six months after the effective date of coverage. b. For the preexisting condition exclusion above, the effective date of coverage for that part of the insurance attributable to a different advance or a charge to the plan account may be the date on which the advance or charge occurs. c. A definition of disability providing that for the first twelve months of disability, total disability shall be defined as the inability to perform the essential functions of the insured's own occupation. Thereafter, it shall mean the inability of the insured to perform the essential functions of any occupation for which the insured is reasonably suited by virtue of education, training, or experience. d. No employment requirement more restrictive than one requiring that the debtor be employed full time on the effective date of coverage and for at least twelve consecutive months prior to the effective date of coverage. "Full time" means a regular workweek of not less than thirty hours. e. An age restriction providing that no insurance will become effective on debtors on or after the attainment of age sixty-six and that all insurance will terminate upon attainment by the debtor of age sixty-six. f. A daily benefit of not less than one-thirtieth of the monthly benefit payable under the policy. g. Guaranteed issue. An insurer must issue a benefit amount up to five thousand dollars without regard to a debtor's or creditor's health status. A credit accident and health insurance benefit amount in excess of five thousand dollars may be denied based upon the company's underwriting determination. The benefit amount for credit accident and health insurance is defined as the monthly disability payment times the maximum number of payments payable.