Premium Rates For Other Lawful Benefits

If a contract of insurance includes other lawful benefit or benefits for which standards of reasonableness of benefits in relation to premiums are not elsewhere in this rule determined or described, any premium charged therefor shall be shown to the satisfaction of the superintendent of insurance to be based upon credible data and shall meet the basic test of reasonableness described in Subsection B of 13.18.2.17 NMAC of this rule. [13.18.2.24 NMAC - Rp, 13.18.2.24 NMAC, 3/11/2025] 13.18.2.25 INSURABILITY REQUIREMENTS PERMITTED FOR INCREASED OPEN-ENDED CREDIT LIFE INSURANCE: If a debtor has credit life insurance under an open-end outstanding balance policy, the policy may provide that an increase in the amount of insurance because of an increase in the amount of indebtedness will be subject to conditions of insurability. Any policy provision regarding evidence of insurability for an increase will comply with the following. A. No charge for or cost of any such additional coverage will be incurred by any debtor, except by voluntary acceptance of the coverage and submission of such lawful statement as is required by the insurer. Voluntary acceptance will not be deemed to have occurred except by a specific positive written response by the debtor to a notice of availability of the coverage; it may not be automatic subject to an act of rejection or notification by the debtor. B. The effective date of any such increase in coverage may be either of the following: (1) the date on which the indebtedness is increased. In this event, however, if specific positive written response is not received within 75 days of such increase, or if such response is not satisfactory to the insurer, then the additional insurance shall not be effective, and any premium which has been paid therefore shall be refunded or credited to the account of the debtor not more than 90 days after the increase in indebtedness; any claim which occurs when positive response has not been received, but before the date by which such response must be received, will be paid if the debtor was eligible for the insurance under the terms of the policy; if the premium has been paid, but not refunded or credited to the account of the debtor not more than 90 days after the increase in indebtedness, the insurance shall be effective regardless of the eligibility of the debtor; or (2) the date on which specific positive written response satisfactory to the insurer is received by the insurer; (3) nothing herein shall preclude a policy provision prohibiting any increases in the amount of insurance while the insured is disabled. [13.18.2.25 NMAC - Rp, 13.18.2.25 NMAC, 3/11/2025] 13.18.2.26 PRESUMPTIVELY ACCEPTABLE RELATION OF CREDIT ACCIDENT AND HEALTH BENEFITS TO PREMIUMS (PRIMA FACIE): A. The superintendent may presume (subject, however, to a rebuttal of the presumption) that the benefits of an accident and health insurance form are reasonable in relation to the premium charged if the premium rate schedule for such accident and health benefits, as filed, does not exceed an amount equal to, or actuarially consistent with the following rate structure where rates will be determined by the superintendent as necessary via bulletin, by: (1) Original number of equal monthly installments; (2) Benefits payable after the 14th day of disability indicating: (a) Retroactive; and (b) Non-retroactive; (3) Benefits payable after the 30th day of disability indicating: 13.18.2 NMAC 8 (a) Retroactive; and (b) Non-retroactive. B. A monthly premium will be determined by the superintendent as necessary via bulletin, by an amount 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. C. Except for credit accident and health insurance sold in connection with open-end loans, the rates for premiums payable on other than a single premium basis shall be actuarially consistent with the rates set forth in Subsection A of 13.18.2.26 NMAC above. Such premium rates will be deemed actuarially consistent with the foregoing single premium rates if such rates produce a total premium for any duration and amount of insurance equal to the corresponding single premium for the same duration and amount of insurance. Rates computed according to the following formula are presumed to satisfy this requirement: Op = 20SPn/n+1, where: (1) SPn = single premium rate per $100 of initial indebtedness repayable in “n” installments; (2) Op = monthly outstanding balance premium rate per $1,000; (3) n = original repayment period, in months. 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 that will be determined by the superintendent as necessary via bulletin, by: (1) benefits payable after the 14th day of disability: (a) retroactive to first day: an amount per month per $100 of outstanding balance insured indebtedness; (b) non-retroactive: an amount per month per $100 of outstanding balance insured indebtedness; (2) benefits payable after the 30th day of disability: (a) retroactive to first day: an amount per month per $100 of outstanding balance insured indebtedness; (b) non-retroactive: an amount per month per $100 of outstanding balance insured indebtedness. E. The premium in Paragraphs (1) and (2) of Subsection D of 13.18.2.26 NMAC above are based upon the assumption that benefits will be paid as long as there is an outstanding balance and the insured is disabled. If there is a provision that benefit payment may cease during the disability of the insured before the indebtedness outstanding on the date of disability, including interest on such indebtedness, is retired, then these premiums will be adjusted to reflect, in the opinion of the superintendent of insurance, the effect of such provision. F. If a contract of insurance includes other lawful benefit or benefits for which standards of reasonableness of benefits in relation to premium are not elsewhere in this rule determined or described, any premium charged therefor shall be shown to the satisfaction of the superintendent to be based upon credible data and shall meet the basic tests of reasonableness described in Paragraphs (1) and (2) of Subsection B of 13.18.2.17 NMAC.