NM Insurance Bulletin 2017-012
Adjustment of Presumptively Acceptable Credit Life Insurance and Credit Accident and Health Insurance Premium Rates
SUPERINTENDENT OF INSURANCE
John G. Franchini 505-827-4299
NEW MEXICO
OFFICE OF
SUPERINTENDENT
OF INSURANCE
DEPUTY SUPERINTENDENT
Robert Doucette 505-827-5832
FILED
2017 AUG 25 PM 2:33
NM OFFICE OF
SUPERINTENDENT
OF INSURANCE
Bulletin 2017-012
August 25, 2017
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 sections 59A-2-8, 59A-2-10 NMSA 1978 and sections 13.18.2.44, 13.18.2.45 and 13.1.2. et seq. 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 ratios 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 stated in the rule for each type of insurance.
The presumptively acceptable rates were not updated in 2013 based on the 2012 statistical reports, but were updated in 2016 based on the 2014 statistical reports. This Bulletin adjusts the presumptively acceptable rates based on the 2016 statistical reports. These rates are adjusted by smoothing to mitigate inconsistencies. In no case is the resulting rate more than one cent less than the resulting rate obtained by strict imposition of the specified formula.
Main Phone: 505-827-4601
Main Fax: 505-827-4734
Toll Free: 1-855-4-ASK-OSI
Mailing Address:
P.O. Box 1689
Santa Fe, NM 87504-1689
Physical Address:
1120 Paseo de Peralta
Santa Fe, NM 87501
Website: WWW.OSI.STATE.NM.US
othing to mitigate inconsistencies. In no case is the resulting rate more than one cent less than the resulting rate obtained by strict imposition of the specified formula.
Main Phone: 505-827-4601
Main Fax: 505-827-4734
Toll Free: 1-855-4-ASK-OSI
Mailing Address:
P.O. Box 1689
Santa Fe, NM 87504-1689
Physical Address:
1120 Paseo de Peralta
Santa Fe, NM 87501
Website: WWW.OSI.STATE.NM.US
The calendar year 2016 statistical statements establish that the combined loss ratio of all insurers writing credit life insurance, individual or group, exceeds ninety percent (90%) of the loss ratio stated in Paragraph 1 of Subsection B of 13.18.2.17 NMAC. Accordingly, and pursuant to 13.18.2.44 NMAC, the credit life insurance premiums stated in Subsections A through D of 13.18.2.18 NMAC and Subsection A of 13.18.2.20 NMAC, as previously reduced, shall not be reduced from the previous presumptively acceptable rates at this time. The attached Table 1, Presumptively Acceptable Credit Life Insurance Premiums, contains the same prima facie rates that are currently effective and that shall remain effective as of January 1, 2018.
The calendar year 2016 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 stated in Paragraph 2 of Subsection B of 13.18.2.17 NMAC. Accordingly, and pursuant to 13.18.2.45 NMAC, the credit accident and health insurance premiums stated in Subsections A, B, and D of 13.18.2.26 NMAC, as previously reduced, shall again be reduced by ten percent (10%) as specified above. The attached Table 2, Presumptively Acceptable Credit Accident and Health Insurance Premiums, contains the aforementioned prima facie rates that shall be effective as of January 1, 2018.
Any person aggrieved by a Bulletin may request a hearing before the Superintendent in accordance with Section 59A-4-15 NMSA 1978.
reviously reduced, shall again be reduced by ten percent (10%) as specified above. The attached Table 2, Presumptively Acceptable Credit Accident and Health Insurance Premiums, contains the aforementioned prima facie rates that shall be effective as of January 1, 2018.
Any person aggrieved by a Bulletin may request a hearing before the Superintendent in accordance with Section 59A-4-15 NMSA 1978.
If you have additional questions regarding this Bulletin, please contact Terry Seaton at terry.seaton@state.nm.us, or Alan Seeley at alan.seeley@state.nm.us.
DONE AND ORDERED this 25th day of August, 2017.
JOHN G. FRANCHINI
Superintendent of Insurance
Main Phone: 505-827-4601
Main Fax: 505-827-4734
Toll Free: 1-855-4-ASK-OSI
Mailing Address:
P.O. Box 1689
Santa Fe, NM 87504-1689
Physical Address:
1120 Paseo de Peralta
Santa Fe, NM 87501
Website: WWW.OSI.STATE.NM.US
# Table 1
Effective January 01, 2018
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: $0.43 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) | $0.27 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) | $0.50 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: $0.63 per month per $1,000.00 of outstanding balance indebtedness. |
| 13.18.2.18.D
nd |
| 13.18.2.18.B(2) | $0.50 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: $0.63 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) | $0.40 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) | $0.74 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 = $0.43 (PSA) - $0.63 (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).
Main Phone: 505-827-4601
Main Fax: 505-827-4734
Toll Free: 1-855-4-ASK-OSI
Mailing Address:
P.O. Box 1689
Santa Fe, NM 87504-1689
Physical Address:
1120 Paseo de Peralta
Santa Fe, NM 87501
Website: WWW.OSI.STATE.NM.US
Table 2, cont'd
tage of revolving accounts held jointly expressed as a decimal fraction (for the first year, use all accounts; for subsequent years, use insured accounts).
Main Phone: 505-827-4601
Main Fax: 505-827-4734
Toll Free: 1-855-4-ASK-OSI
Mailing Address:
P.O. Box 1689
Santa Fe, NM 87504-1689
Physical Address:
1120 Paseo de Peralta
Santa Fe, NM 87501
Website: WWW.OSI.STATE.NM.US
Table 2, cont'd
| 31 | 1.32 | 1.03 | 1.14 | 0.85 |
| --- | --- | --- | --- | --- |
| 32 | 1.35 | 1.05 | 1.17 | 0.87 |
| 33 | 1.38 | 1.08 | 1.19 | 0.89 |
| 34 | 1.40 | 1.10 | 1.21 | 0.90 |
| 35 | 1.43 | 1.12 | 1.24 | 0.92 |
| 36 | 1.45 | 1.14 | 1.26 | 0.94 |
| 37 | 1.47 | 1.16 | 1.28 | 0.96 |
| 38 | 1.48 | 1.18 | 1.30 | 0.98 |
| 39 | 1.50 | 1.20 | 1.32 | 1.00 |
| 40 | 1.51 | 1.22 | 1.33 | 1.02 |
| 41 | 1.53 | 1.23 | 1.35 | 1.04 |
| 42 | 1.54 | 1.25 | 1.36 | 1.06 |
| 43 | 1.55 | 1.26 | 1.38 | 1.08 |
| 44 | 1.56 | 1.28 | 1.39 | 1.10 |
| 45 | 1.57 | 1.30 | 1.40 | 1.13 |
| 46 | 1.59 | 1.32 | 1.42 | 1.15 |
| 47 | 1.60 | 1.33 | 1.43 | 1.17 |
| 48 | 1.61 | 1.35 | 1.45 | 1.20 |
| 49 | 1.62 | 1.36 | 1.46 | 1.22 |
| 50 | 1.63 | 1.37 | 1.48 | 1.25 |
| 51 | 1.64 | 1.38 | 1.49 | 1.27 |
| 52 | 1.65 | 1.39 | 1.51 | 1.29 |
| 53 | 1.66 | 1.40 | 1.52 | 1.31 |
| 54 | 1.68 | 1.42 | 1.54 | 1.34 |
| 55 | 1.69 | 1.44 | 1.55 | 1.36 |
| 56 | 1.70 | 1.45 | 1.56 | 1.38 |
| 57 | 1.71 | 1.46 | 1.57 | 1.40 |
| 58 | 1.72 | 1.47 | 1.59 | 1.43 |
| 59 | 1.73 | 1.48 | 1.61 | 1.45 |
| 60 | 1.74 | 1.50 | 1.62 | 1.47 |
| 61 | 1.76 | 1.51 | 1.63 | 1.49 |
| 62 | 1.77 | 1.52 | 1.64 | 1.50 |
| 63 | 1.78 | 1.53 | 1.65 | 1.51 |
| 64 | 1.79 | 1.54 | 1.66 | 1.52 |
| 65 | 1.80 | 1.55 | 1.68 | 1.53 |
| 66 | 1.81 | 1.56 | 1.69 | 1.54 |
| 67 | 1.83 | 1.58 | 1.70 | 1.55 |
| 68 | 1.84 | 1.59 | 1.71 | 1.56 |
| 69 | 1.85 | 1.60 | 1.72 | 1.57 |
Main Phone: 505-827-4601
Main Fax: 505-827-4734
Toll Free: 1-855-4-ASK-OSI
Mailing Address:
P.O. Box 1689
Santa Fe, NM 87504-1689
Physical Address:
| 1.53 | 1.65 | 1.51 |
| 64 | 1.79 | 1.54 | 1.66 | 1.52 |
| 65 | 1.80 | 1.55 | 1.68 | 1.53 |
| 66 | 1.81 | 1.56 | 1.69 | 1.54 |
| 67 | 1.83 | 1.58 | 1.70 | 1.55 |
| 68 | 1.84 | 1.59 | 1.71 | 1.56 |
| 69 | 1.85 | 1.60 | 1.72 | 1.57 |
Main Phone: 505-827-4601
Main Fax: 505-827-4734
Toll Free: 1-855-4-ASK-OSI
Mailing Address:
P.O. Box 1689
Santa Fe, NM 87504-1689
Physical Address:
1120 Paseo de Peralta
Santa Fe, NM 87501
Website: WWW.OSI.STATE.NM.US
Table 2, cont'd
| 70 | 1.86 | 1.61 | 1.74 | 1.58 |
| --- | --- | --- | --- | --- |
| 71 | 1.87 | 1.62 | 1.75 | 1.59 |
| 72 | 1.88 | 1.63 | 1.77 | 1.60 |
| 73 | 1.89 | 1.64 | 1.78 | 1.61 |
| 74 | 1.90 | 1.65 | 1.79 | 1.62 |
| 75 | 1.91 | 1.66 | 1.80 | 1.63 |
| 76 | 1.93 | 1.67 | 1.81 | 1.64 |
| 77 | 1.94 | 1.68 | 1.83 | 1.65 |
| 78 | 1.95 | 1.69 | 1.84 | 1.66 |
| 79 | 1.97 | 1.70 | 1.86 | 1.67 |
| 80 | 1.98 | 1.71 | 1.87 | 1.68 |
| 81 | 1.99 | 1.73 | 1.88 | 1.69 |
| 82 | 2.00 | 1.74 | 1.89 | 1.70 |
| 83 | 2.02 | 1.76 | 1.91 | 1.71 |
| 84 | 2.03 | 1.77 | 1.92 | 1.72 |
| 85 | 2.04 | 1.78 | 1.93 | 1.73 |
| 86 | 2.05 | 1.79 | 1.95 | 1.74 |
| 87 | 2.06 | 1.80 | 1.96 | 1.76 |
| 88 | 2.07 | 1.81 | 1.97 | 1.77 |
| 89 | 2.08 | 1.82 | 1.98 | 1.78 |
| 90 | 2.09 | 1.83 | 1.99 | 1.79 |
| 91 | 2.10 | 1.84 | 2.01 | 1.80 |
| 92 | 2.11 | 1.85 | 2.03 | 1.81 |
| 93 | 2.12 | 1.87 | 2.04 | 1.82 |
| 94 | 2.14 | 1.88 | 2.05 | 1.83 |
| 95 | 2.15 | 1.89 | 2.07 | 1.85 |
| 96 | 2.16 | 1.90 | 2.08 | 1.86 |
| 97 | 2.17 | 1.91 | 2.09 | 1.87 |
| 98 | 2.18 | 1.93 | 2.10 | 1.88 |
| 99 | 2.19 | 1.94 | 2.11 | 1.89 |
| 100 | 2.20 | 1.95 | 2.12 | 1.90 |
| 101 | 2.22 | 1.96 | 2.14 | 1.91 |
| 102 | 2.23 | 1.97 | 2.16 | 1.93 |
| 103 | 2.24 | 1.98 | 2.17 | 1.94 |
| 104 | 2.25 | 1.99 | 2.18 | 1.95 |
| 105 | 2.26 | 2.00 | 2.19 | 1.97 |
| 106 | 2.27 | 2.02 | 2.20 | 1.98 |
| 107 | 2.28 | 2.03 | 2.21 | 1.99 |
| 108 | 2.30 | 2.04 | 2.23 | 2.00 |
Main Phone: 505-827-4601
Main Fax: 505-827-4734
1.89 |
| 100 | 2.20 | 1.95 | 2.12 | 1.90 |
| 101 | 2.22 | 1.96 | 2.14 | 1.91 |
| 102 | 2.23 | 1.97 | 2.16 | 1.93 |
| 103 | 2.24 | 1.98 | 2.17 | 1.94 |
| 104 | 2.25 | 1.99 | 2.18 | 1.95 |
| 105 | 2.26 | 2.00 | 2.19 | 1.97 |
| 106 | 2.27 | 2.02 | 2.20 | 1.98 |
| 107 | 2.28 | 2.03 | 2.21 | 1.99 |
| 108 | 2.30 | 2.04 | 2.23 | 2.00 |
Main Phone: 505-827-4601
Main Fax: 505-827-4734
Toll Free: 1-855-4-ASK-OSI
Mailing Address:
P.O. Box 1689
Santa Fe, NM 87504-1689
Physical Address:
1120 Paseo de Peralta
Santa Fe, NM 87501
Website: WWW.OSI.STATE.NM.US
Table 2, cont'd
| 109 | 2.31 | 2.05 | 2.25 | 2.02 |
| --- | --- | --- | --- | --- |
| 110 | 2.32 | 2.06 | 2.26 | 2.03 |
| 111 | 2.33 | 2.08 | 2.27 | 2.04 |
| 112 | 2.34 | 2.09 | 2.28 | 2.05 |
| 113 | 2.35 | 2.10 | 2.30 | 2.07 |
| 114 | 2.36 | 2.11 | 2.31 | 2.08 |
| 115 | 2.37 | 2.12 | 2.32 | 2.09 |
| 116 | 2.39 | 2.13 | 2.33 | 2.11 |
| 117 | 2.40 | 2.14 | 2.35 | 2.12 |
| 118 | 2.42 | 2.16 | 2.36 | 2.13 |
| 119 | 2.43 | 2.17 | 2.37 | 2.15 |
| 120 | 2.44 | 2.18 | 2.38 | 2.16 |
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
| 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: $0.12 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; |
Main Phone: 505-827-4601
Main Fax: 505-827-4734
Toll Free: 1-855-4-ASK-OSI
Mailing Address:
P.O. Box 1689
Santa Fe, NM 87504-1689
Physical Address:
1120 Paseo de Peralta
Santa Fe, NM 87501
Website: WWW.OSI.STATE.NM.US