Bulletin 2008-12 Notice of Tentative Credit Accident and Health Insurance Rates

TO: FROM: SURIECT: BULLETIN NUMBER 2008-12 Insurers Writing Credit Accident and Health Insurance in South Carolina in Conjunction Consumer Credit Transactions subject to the South Carolina Consumer Protection Code (S.C. Code Ann.§ 37-1-101 et seq.), Other Than Loans Made Under Act 988 of 1966 Scott H. Richardsm Director Notice ofTentative Credit Accident and Health Insurance Rates and Opportunity to Request a Hearing DATE: August I, 2008 I. Notice ofTentative Credit Accident and Health Insurance Rates Regulation 69-11 requires the Department to promulgate tentative rates for credit accident and health insurance by August 1 of each year. The tentative rates are those the Department believes may reasonably be expected to produce a loss ratio of not less than 50%) in the following calendar year. This bulletin constitutes official notice of the tentative rates for 2009. The South Carolina Department of Insurance has reviewed the experience for the past several years for the above described credit accident and health insurance. The aggregate loss ratio for credit accident and health insurance at the prima facie rates has decreased steadily since 2003. Specifically, the loss ratio was 69.4% in 2003, 57.3% in 2004, 52S~Ir) in 2005, 47.6% in 2006, and 46.8% in 2007. The current aggregate loss ratio is not significantly less than the benchmark loss ratio of 50%. In light of this and the ongoing credit crisis and possible national economic recession, the tentative rates proposed for 2009 for both 14-Day Retro and 30-Day Retro coverage are unchanged rates. The tentative premiUm rates per S I 00 of initial indebtedness proposed for 2009 for both types of insurance are listed below for your convenience: Period 14-Day Retro 30-Day Retro For periods that do not equal an integral number of years, the rates may be interpolated to the upper quarter of a year but finer interpolations will be pennitted to the equivalent of the nearest month. Thus, for example, the rates for a period from 0 to 3 months for the 14-day plan would be one-fourth of$1.70 or $0.43. II. Opportunitv for a Hearing S.C. Code Ann. Reg. 69-11.1 ( 1989) provides that "every insurer which feels aggrieved by any of the rates so promulgated may request a public hearing with respect to such rate or rates" within 15 days. See S.C. Code Ann. Reg. 69-11.1 C (5) ( 1989). Accordingly, all requests for a hearing must be filed with the Department on or before August 16, 2008. Please direct your requests for a hearing to the attention of Jeffrey Jacobs, Chief Legal Counsel. Attach to your request for a hearing documentation supporting your position that the tentative rates for credit accident and health insurance need to be changed. After all such hearings have been held, the final rate or an affirmation of the tentative rate shall be sent to all companies before October l, 2008. Please direct any questions regarding this bulletin to the attention of Derek McKee at the address and number listed belO\V. Derek McKee Assistant Actuary South Carolina Department of Insurance 145 King St., Suite 207 Charleston, SC 29401 Telephone: 843-579-0527 Facsimile: 843-722-6105 E-mail: dmckee@d01.sc.gov