Bulletin 2006-05 Notice of Tentative Credit Accident, Health Insurance Rates and Oppt. to Request...

TO: FROM: SUBJECT: DATE: South C~arolina J)epartment of Insurance 300 Arbor Lake Drive, Suite 1200 Columbia, South Carolina 29223 Mailing Address: f>.O. Box 100105, Columbia, S.C. 29202-3105 Telephone: (803) 737-6160 BULLETIN NUMBER 2006-05 MARK SANFORD Governor ELEANOR KITZMAN Director of Insurance Insurers Writing Credit Accident and Health Insurance in South Carolina in Conjunction with 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 Eleanor Kitzma~ I; , Director ~ Notice of Tentative Credit Accident and Health Insurance Rates and Opportunity to Request a Hearing August 1, 2006 I. Notice of Tentative 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 2007. 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 has decreased steadily since 2003. Specifically, the loss ratio was 69.4% in 2003, 57.3% in 2004, and 53.1% in 2005. In light of this decrease and the fact that the current aggregate loss ratio is only slightly higher than the benchmark loss ratio of 50%, the tentative rates proposed for 2007 for both 14-Day and Retro 30-Day Retro coverage remain unchanged. Therefore, the tentative single premium rates per $100 of initial indebtedness proposed for 2006 for both types of insurance are listed below for your convenience: Period 14-Day Retro 30-Day Retro 12 Months $1.70 $1.60 24 Months 2.30 2.20 higher than the benchmark loss ratio of 50%, the tentative rates proposed for 2007 for both 14-Day and Retro 30-Day Retro coverage remain unchanged. Therefore, the tentative single premium rates per $100 of initial indebtedness proposed for 2006 for both types of insurance are listed below for your convenience: Period 14-Day Retro 30-Day Retro 12 Months $1.70 $1.60 24 Months 2.30 2.20 36 Months 2.90 2.80 48 Months 3.40 3.30 60 Months 3.90 3.80 72 Months 4.30 4.20 84 Months 4.70 4.60 96 Months 5.00 4.90 108 Months 5.30 5.20 120 Months 5.60 5.50 132 Months 5.90 5.80 144 Months 6.10 6.00 156 Months 6.30 6.20 168 Months 6.50 6.40 180 Months 6.70 6.60 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 permitted 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 $.43. II. Opportunity 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 Aim. Reg. 69-11.1 D (5) (1989). Accordingly, all requests for a hearing must be filed with the Department on or before August 16, . 2006. 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 rates 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 1, 2006. Please direct any questions regarding this bulletin to the attention of Carla Lachance at the address and number listed below ocumentation supporting your position that the tentative rates for credit accident and health rates 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 1, 2006. Please direct any questions regarding this bulletin to the attention of Carla Lachance at the address and number listed below. Carla Lachance Manager Forms and Rates South Carolina Department of Insurance 300 Arbor Lake Drive, Suite 1200 Columbia, South Carolina 29223 Telephone: (803) 737-6230 Facsimile: (803) 737-6233 E-mail: clachance@doi.sc.gov