NM Insurance Bulletin 2019-018
ADJUSTMENT OF PRESUMPTIVELY ACCEPTABLE CREDIT LIFE INSURANCE AND CREDIT ACCIDENT AND HEALTH INSURANC
# STATE OF NEW MEXICO
OFFICE OF SUPERINTENDENT OF INSURANCE
DEPUTY SUPERINTENDENT
Robert E. Doucette, Jr.
OFFICE OF
NEW MEXICO
SUPERINTENDENT
OF INSURANCE
DEPUTY SUPERINTENDENT
Andy Romero
FILED
SUPERINTENDENT OF INSURANCE
John G. Franchini
BULLETIN 2019-018
December 30, 2019
TO: CREDIT LIFE AND CREDIT ACCIDENT AND HEALTH INSURERS
RE: ADJUSTMENT OF PRESUMPTIVELY ACCEPTABLE CREDIT LIFE INSURANCE AND CREDIT ACCIDENT AND HEALTH INSURANCE PREMIUM RATES
THE FOLLOWING BULLETIN is issued pursuant to NMSA 1978, Sections 59A-2-8 and 59A-2-10 and 13.1.2 et seq., 13.18.2.44, and 13.18.45 NMAC.
The Credit Life and Credit Health Insurance Rule, 13.18.2 NMAC, provides for reduction of the presumptively acceptable credit life insurance premiums and credit accident and health insurance premiums set forth in the rule if the combined loss ratio of all insurers writing each type of insurance for the calendar year 2000 or any even-numbered calendar year thereafter, as filed in the NAIC statistical statements, does not equal or exceed ninety percent (90%) of the loss ratios set forth in the rule for each type of insurance.
The presumptively acceptable rates were updated in OSI Bulletin 2017-012 based on the 2016 statistical statements. This Bulletin adjusts the presumptively acceptable rates based on the 2018 statistical statements.
The calendar year 2018 statistical statements establish that the combined loss ratio of all insurers writing credit life insurance, individual or group, does not equal or exceed ninety percent (90%) of the loss ratio set forth in 13.18.2.17(B)(1) NMAC. Accordingly, and pursuant to 13.18.2.44 NMAC, the credit life insurance premiums set forth in 13.18.2.18(A) through (D) NMAC and in 13.18.2.20(A) NMAC, as reduced in Bulletin 2016-007, shall be reduced ten percent (10%). The results have been rounded to the higher whole cent as required by 13.18.2.44 NMAC. The attached
Main Office: 1120 Paseo de Peralta, Room 428, Santa Fe, NM 87501
Satellite Office: 6200 Uptown Blvd NE, Suite 100, Albuquerque, NM 87110
Main Phone: (505) 827-4601 | Satellite Phone: (505) 322-2186 | Toll Free: (855) 4 - ASK - OSI
www.osi.state.nm.us
BULLETIN 2019-018
Page | 2
Table 1, Presumptively Acceptable Credit Life Insurance Premiums, contains the prima facie rates that shall be effective as of January 1, 2020.
The calendar year 2018 statistical statements establish that the combined loss ratio of all insurers writing credit accident and health insurance, individual or group, does not equal or exceed ninety percent (90%) of the loss ratio set forth in 13.18.2.17(B)(2) NMAC. Accordingly, and pursuant to 13.18.2.45 NMAC, the credit life insurance premiums set forth in 13.18.2.26(A), (B), and (D) NMAC, as reduced in Bulletin 2017-012, shall again be reduced be ten percent (10%). The results have been rounded to the higher whole cent as required by 13.18.2.45 NMAC. The attached Table 2, Presumptively Acceptable Credit Accident and Health Insurance Premiums, contains the prima facie rates that shall be effective as of January 1, 2020.
Any person aggrieved by this Bulletin may request a hearing before the Superintendent of Insurance in accordance with NMSA 1978, § 59A-4-15.
If you have questions regarding this Bulletin, please contact Anna Krylova at anna.krylova@state.nm.us or Bogdanka Kurahovic at bogdanka.kurahovic@state.nm.us.
ISSUED this 30th day of December, 2019.
JOHN G. FRANCHINI
SUPERINTENDENT OF INSURANCE
Main Office: 1120 Paseo de Peralta, Room 428, Santa Fe, NM 87501
Satellite Office: 6200 Uptown Blvd NE, Suite 100, Albuquerque, NM 87110
Main Phone: (505) 827-4601 | Satellite Phone: (505) 322-2186 | Toll Free: (855) 4 - ASK - OSI
www.osi.state.nm.us
# Table 1
Effective January 01, 2020
Presumptively Acceptable Credit Life Insurance Premiums (prima facie rates):
Relative to NMAC:
| 13.18.2.18.A | Coverage on a single life provided on the outstanding indebtedness basis: $0.39 per month per $1,000.00 of outstanding balance indebtedness. |
| --- | --- |
| 13.18.2.18.B | Coverage on a single life on the single premium basis: |
| 13.18.2.18.B(1) | $0.25 per year of coverage per $100.00 of initial insured indebtedness for all credit transactions when the insured indebtedness is payable in substantially equal monthly installments during the term of coverage; and |
| 13.18.2.18.B(2) | $0.45 per year of coverage per $100.00 of level life insurance where the amount of insured indebtedness remains level during the term of coverage and is repayable in a single sum at the end of the term. |
| 13.18.2.18.C | Coverage on joint lives on the outstanding indebtedness basis: $0.57 per month per $1,000.00 of outstanding balance indebtedness. |
| 13.18.2.18.D | Coverage for joint lives on the single premium basis: |
| 13.18.2.18.D(1) | $0.36 per year of coverage per $100.00 of initial insured indebtedness for all credit transactions when the insured indebtedness is repayable in substantially equal monthly installments during the term of coverage; and |
| 13.18.2.18.D(2) | $0.67 per year of coverage per $100.00 of level life insurance where the amount of insured indebtedness remains level during the term of coverage and is repayable in a single sum at the end of the term. |
| 13.18.2.20.A | Composite Single Joint Outstanding Balance Rate (prima facie rates): COB = $0.39 (PSA) - $0.57 (PJA), where (1) COB = composite outstanding balance life rate per $1,000 per month; (2) PSA = percentage of open-end accounts held by a single person expressed as a decimal fraction (for the first year, use all accounts; for subsequent years, use insured accounts); (3) PJA = percentage of revolving accounts held jointly expressed as a decimal fraction (for the first year, use all accounts; for subsequent years, use insured accounts). |
Table 2
Effective January 01, 2020
# Presumptively Acceptable Credit Accident and Health Insurance Premiums
(prima facie rates):
Relative to NMAC:
13.18.2.26.A Single Premium Rate per $100 of Initial Insured Indebtedness
| Original Number of Equal Monthly Installments | Benefits Payable After the 14th Day of Disability | | Benefits Payable After the 30th Day of Disability | |
| --- | --- | --- | --- | --- |
| | Retroactive to the First Day | Non-Retroactive | Retroactive to the First Day | Non-Retroactive |
| 3 | 0.34 | 0.25 | | |
| 4 | 0.44 | 0.31 | | |
| 5 | 0.53 | 0.38 | | |
| 6 | 0.60 | 0.45 | 0.43 | 0.30 |
| 7 | 0.64 | 0.51 | 0.47 | 0.34 |
| 8 | 0.67 | 0.54 | 0.50 | 0.37 |
| 9 | 0.70 | 0.57 | 0.54 | 0.41 |
| 10 | 0.72 | 0.59 | 0.57 | 0.44 |
| 11 | 0.73 | 0.61 | 0.59 | 0.45 |
| 12 | 0.76 | 0.63 | 0.61 | 0.48 |
| 13 | 0.78 | 0.65 | 0.63 | 0.50 |
| 14 | 0.81 | 0.67 | 0.65 | 0.53 |
| 15 | 0.82 | 0.69 | 0.67 | 0.54 |
| 16 | 0.84 | 0.71 | 0.69 | 0.57 |
| 17 | 0.87 | 0.72 | 0.72 | 0.59 |
| 18 | 0.90 | 0.73 | 0.73 | 0.61 |
| 19 | 0.92 | 0.74 | 0.76 | 0.63 |
| 20 | 0.95 | 0.76 | 0.79 | 0.64 |
| 21 | 0.97 | 0.77 | 0.81 | 0.65 |
| 22 | 0.99 | 0.79 | 0.84 | 0.66 |
| 23 | 1.02 | 0.81 | 0.87 | 0.67 |
| 24 | 1.04 | 0.81 | 0.89 | 0.68 |
| 25 | 1.06 | 0.82 | 0.90 | 0.69 |
| 26 | 1.08 | 0.84 | 0.93 | 0.71 |
| 27 | 1.10 | 0.85 | 0.95 | 0.72 |
| 28 | 1.13 | 0.87 | 0.97 | 0.72 |
| 29 | 1.15 | 0.89 | 0.99 | 0.73 |
| 30 | 1.17 | 0.90 | 1.01 | 0.75 |
Table 2, cont'd
| 31 | 1.19 | 0.93 | 1.03 | 0.77 |
| --- | --- | --- | --- | --- |
| 32 | 1.22 | 0.95 | 1.06 | 0.79 |
| 33 | 1.25 | 0.98 | 1.08 | 0.81 |
| 34 | 1.26 | 0.99 | 1.09 | 0.81 |
| 35 | 1.29 | 1.01 | 1.12 | 0.83 |
| 36 | 1.31 | 1.03 | 1.14 | 0.85 |
| 37 | 1.33 | 1.05 | 1.16 | 0.87 |
| 38 | 1.34 | 1.07 | 1.17 | 0.89 |
| 39 | 1.35 | 1.08 | 1.19 | 0.90 |
| 40 | 1.36 | 1.10 | 1.20 | 0.92 |
| 41 | 1.38 | 1.11 | 1.22 | 0.94 |
| 42 | 1.39 | 1.13 | 1.23 | 0.96 |
| 43 | 1.40 | 1.14 | 1.25 | 0.98 |
| 44 | 1.41 | 1.16 | 1.26 | 0.99 |
| 45 | 1.42 | 1.17 | 1.26 | 1.02 |
| 46 | 1.44 | 1.19 | 1.28 | 1.04 |
| 47 | 1.44 | 1.20 | 1.29 | 1.06 |
| 48 | 1.45 | 1.22 | 1.31 | 1.08 |
| 49 | 1.46 | 1.23 | 1.32 | 1.10 |
| 50 | 1.47 | 1.24 | 1.34 | 1.13 |
| 51 | 1.48 | 1.25 | 1.35 | 1.15 |
| 52 | 1.49 | 1.26 | 1.36 | 1.17 |
| 53 | 1.50 | 1.26 | 1.37 | 1.18 |
| 54 | 1.52 | 1.28 | 1.39 | 1.21 |
| 55 | 1.53 | 1.30 | 1.40 | 1.23 |
| 56 | 1.53 | 1.31 | 1.41 | 1.25 |
| 57 | 1.54 | 1.32 | 1.42 | 1.26 |
| 58 | 1.55 | 1.33 | 1.44 | 1.29 |
| 59 | 1.56 | 1.34 | 1.45 | 1.31 |
| 60 | 1.57 | 1.35 | 1.46 | 1.33 |
| 61 | 1.59 | 1.36 | 1.47 | 1.35 |
| 62 | 1.60 | 1.37 | 1.48 | 1.35 |
| 63 | 1.61 | 1.38 | 1.49 | 1.36 |
| 64 | 1.62 | 1.39 | 1.50 | 1.37 |
| 65 | 1.62 | 1.40 | 1.52 | 1.38 |
| 66 | 1.63 | 1.41 | 1.53 | 1.39 |
| 67 | 1.65 | 1.43 | 1.53 | 1.40 |
| 68 | 1.66 | 1.44 | 1.54 | 1.41 |
| 69 | 1.67 | 1.44 | 1.55 | 1.42 |
Table 2, cont'd
| 70 | 1.68 | 1.45 | 1.57 | 1.43 |
| --- | --- | --- | --- | --- |
| 71 | 1.69 | 1.46 | 1.58 | 1.44 |
| 72 | 1.70 | 1.47 | 1.60 | 1.44 |
| 73 | 1.71 | 1.48 | 1.61 | 1.45 |
| 74 | 1.71 | 1.49 | 1.62 | 1.46 |
| 75 | 1.72 | 1.50 | 1.62 | 1.47 |
| 76 | 1.74 | 1.51 | 1.63 | 1.48 |
| 77 | 1.75 | 1.52 | 1.65 | 1.49 |
| 78 | 1.76 | 1.53 | 1.66 | 1.50 |
| 79 | 1.78 | 1.53 | 1.68 | 1.51 |
| 80 | 1.79 | 1.54 | 1.69 | 1.52 |
| 81 | 1.80 | 1.56 | 1.70 | 1.53 |
| 82 | 1.80 | 1.57 | 1.71 | 1.53 |
| 83 | 1.82 | 1.59 | 1.72 | 1.54 |
| 84 | 1.83 | 1.60 | 1.73 | 1.55 |
| 85 | 1.84 | 1.61 | 1.74 | 1.56 |
| 86 | 1.85 | 1.62 | 1.76 | 1.57 |
| 87 | 1.86 | 1.62 | 1.77 | 1.59 |
| 88 | 1.87 | 1.63 | 1.78 | 1.60 |
| 89 | 1.88 | 1.64 | 1.79 | 1.61 |
| 90 | 1.89 | 1.65 | 1.80 | 1.62 |
| 91 | 1.89 | 1.66 | 1.81 | 1.62 |
| 92 | 1.90 | 1.67 | 1.83 | 1.63 |
| 93 | 1.91 | 1.69 | 1.84 | 1.64 |
| 94 | 1.93 | 1.70 | 1.85 | 1.65 |
| 95 | 1.94 | 1.71 | 1.87 | 1.67 |
| 96 | 1.95 | 1.71 | 1.88 | 1.68 |
| 97 | 1.96 | 1.72 | 1.89 | 1.69 |
| 98 | 1.97 | 1.74 | 1.89 | 1.70 |
| 99 | 1.98 | 1.75 | 1.90 | 1.71 |
| 100 | 1.98 | 1.76 | 1.91 | 1.71 |
| 101 | 2.00 | 1.77 | 1.93 | 1.72 |
| 102 | 2.01 | 1.78 | 1.95 | 1.74 |
| 103 | 2.02 | 1.79 | 1.96 | 1.75 |
| 104 | 2.03 | 1.80 | 1.97 | 1.76 |
| 105 | 2.04 | 1.80 | 1.98 | 1.78 |
| 106 | 2.05 | 1.82 | 1.98 | 1.79 |
| 107 | 2.06 | 1.83 | 1.99 | 1.80 |
| 108 | 2.07 | 1.84 | 2.01 | 1.80 |
Table 2, cont'd
| 109 | 2.08 | 1.85 | 2.03 | 1.82 |
| --- | --- | --- | --- | --- |
| 110 | 2.09 | 1.86 | 2.04 | 1.83 |
| 111 | 2.10 | 1.88 | 2.05 | 1.84 |
| 112 | 2.11 | 1.89 | 2.06 | 1.85 |
| 113 | 2.12 | 1.89 | 2.07 | 1.87 |
| 114 | 2.13 | 1.90 | 2.08 | 1.88 |
| 115 | 2.14 | 1.91 | 2.09 | 1.89 |
| 116 | 2.16 | 1.92 | 2.10 | 1.90 |
| 117 | 2.16 | 1.93 | 2.12 | 1.91 |
| 118 | 2.18 | 1.95 | 2.13 | 1.92 |
| 119 | 2.19 | 1.96 | 2.14 | 1.94 |
| 120 | 2.20 | 1.97 | 2.15 | 1.95 |
# Relative to NMAC:
13.18.2.26.B A monthly premium of \(0.09 per \)100 of outstanding balance may be presumed reasonable for a disability benefit which consists of a lump sum payment of the amount of indebtedness covered at the beginning of disability, such payment to be made after disability has continued for 90 consecutive days. A daily benefit does not apply to this coverage.
13.18.2.26.D In credit accident and health insurance sold in connection with open-end transactions or monthly closed-end transactions, the superintendent may presume (subject, however, to a rebuttal of the presumption) that the benefits are reasonable in relation to the premium charged if the premium rate schedule for such accident and health insurance transactions does not exceed an amount equal to, or actuarially consistent with, the following rates:
13.18.2.26.D(1) benefits payable after the 14th day of disability:
13.18.2.26.D(1)(a) retroactive to first day: $0.11 per month per $100 of outstanding balance insured indebtedness;
13.18.2.26 .D(1)(b) non-retroactive : $0.09 per month per $100 of outstanding balance insured indebtedness;
13.18.2.26.D(2) benefits payable after the 30th day of disability:
13.18.2.26.D(2)(a) retroactive to first day: $0.09 per month per $100 of outstanding balance insured indebtedness;
13.18.2.26.D(2)(b) non-retroactive : $0.08 per month per $100 of outstanding balance insured indebtedness;