Bulletin 2024-09 Credit Accident and Health Insurance Rates

South Carolina Department of Insurance Capitol Center 1201 Main Street, Suite 1000 Columbia, South Carolina 29201 _________________________ Mailing Address: P.O. Box 100105, Columbia, S.C. 29202-3105 Telephone: (803) 737-6160 HENRY MCMASTER Governor MICHAEL WISE Director BULLETIN NUMBER 2024-09 TO: Insurers Writing Credit Accident and Health Insurance in South Carolina in Conjunction with Consumer Credit Transactions subject to S.C. Code § 37-1-101 et seq., the South Carolina Consumer Protection Code, Other Than Loans Made Under 1966 S.C. Act No. 988, Consumer Finance Law FROM: Michael Wise Director SUBJECT: Notice of Tentative 2025 Credit Accident and Health Insurance Rates and Opportunity to Request a Hearing DATE: August 6, 2024 I. NOTICE OF TENTATIVE CREDIT ACCIDENT AND HEALTH INSURANCE RATES Regulation 69-11.1, Regulation of Credit Insurance, requires the South Carolina Department of Insurance (Department) to promulgate tentative rates for credit accident and health insurance by August 1st of each year. The tentative rates are those the Department believes may reasonably be expected to produce a loss ratio of not less than fifty percent (50%) in the following calendar year. This Bulletin constitutes official notice of the tentative rates for 2025. The Department has reviewed the last several years’ experience for credit accident and health insurance written in conjunction with consumer credit transactions subject to the Consumer Protection Code and not including credit accident and health insurance written in conjunction with loans subject to the Consumer Finance Law. The aggregate loss ratio for credit accident and health insurance at the prima facie rates were: thirty-five and two tenths percent (35.2%) in 2023, thirty- eight and four tenths percent (38.4%) in 2022, thirty-six percent (36.0%) in 2021, and thirty-nine and two tenths percent (39.2%) in 2020. The Department proposes a 15% reduction to rates in 2025 due to continued low loss ratio experience. Bulletins are the method by which the Director of Insurance formally communicates with persons and entities regulated by the Department. Bulletins are departmental interpretations of South Carolina insurance laws and regulations and provide guidance on the Department’s enforcement approach. Bulletins do not provide legal advice. Readers should consult applicable statutes and regulations or contact an attorney for legal advice or for additional information on the impact of that legislation on their specific situation. What follows are the tentative single premium rates per $100 of initial indebtedness proposed for 2025 for credit accident and health insurance: Period 14-Day Retro 30-Day Retro 12 Months $1.05 $0.99 24 Months $1.42 $1.36 36 Months $1.80 $1.73 48 Months $2.11 $2.04 60 Months $2.41 $2.35 72 Months $2.66 $2.60 84 Months $2.92 $2.86 96 Months $3.10 $3.03 108 Months $3.28 $3.22 120 Months $3.48 $3.41 132 Months $3.66 $3.60 144 Months $3.78 $3.71 156 Months $3.90 $3.84 168 Months $4.03 $3.96 180 Months $4.16 $4.10 For periods that do not equal an integral number of years, the rates may be interpolated to the upper quarter of a year with finer interpolations permitted to the equivalent of the nearest month. For example, the rates for a period from 0 to 3 months for the 14-day plan would be one-fourth of $1.05 or $0.26. Rates for policies of credit accident and health insurance where the premiums are paid other than on a single premium basis must be actuarially equivalent with the rates specified above. For open-ended monthly outstanding balance policies that are subject to reporting on the NAIC Credit Accident and Health Insurance Part 2C blank, insurers should calculate their premiums, and then apply an 80% factor. The Department will not approve rates that deviate from the prima facie rates. II. OPPORTUNITY FOR A HEARING Regulation 69-11.1.D.(5) provides that “every insurer which feels aggrieved by any of the rates so promulgated shall have fifteen days to request a public hearing with respect to such rate or rates.” Accordingly, all requests for a hearing must be submitted to the Department in writing on or before August 21, 2024. Please direct any requests for a hearing to the attention of: Gwendolyn McGriff General Counsel South Carolina Department of Insurance Bulletins are the method by which the Director of Insurance formally communicates with persons and entities regulated by the Department. Bulletins are departmental interpretations of South Carolina insurance laws and regulations and provide guidance on the Department’s enforcement approach. Bulletins do not provide legal advice. Readers should consult applicable statutes and regulations or contact an attorney for legal advice or for additional information on the impact of that legislation on their specific situation. Post Office Box 100105 Columbia, South Carolina 29202-3105 All requests must include documentation supporting your position that the tentative rates for credit accident and health insurance need to be changed. After any requested hearings have been held, the final rates or an affirmation of the tentative rates shall be sent to all companies on or around October 1, 2024. III. QUESTIONS Any questions or concerns about this Bulletin should be submitted in writing to the attention of: Andreea Savu, FSA, MAAA Actuary South Carolina Department of Insurance 1201 Main Street, Suite 1000 Columbia, South Carolina 29201 E-mail: asavu@doi.sc.gov