The purpose of this bulletin is to remind companies of the new presumptive premium rates and procedures for credit life and credit accident and health insurance. On October 29, 1999, the Commissioner of Insurance, in accordance with the statutory requirements of the Texas Insurance Code, Article 3.53, ordered changes in the presumptive premium rates for credit life and credit accident and health insurance. These rates are effective April 1, 2000 at 12:01 a.m. The new presumptive rates are provided in Commissioner's Order No. 99-1481, as amended nunc pro tunc by Commissioner's Order No. 00-0214. This order can be found on TDI's website at www.tdi.state.tx.us. under Quick Access/Orders.
The new presumptive rates are enclosed with this bulletin as Appendixes B and C from the Commissioner's Order. Appendix B provides the new presumptive rates for credit life insurance; Appendix C provides the new presumptive rates for credit accident and health insurance.
Note that for the first time the rate order includes discount factors that provide for a discount in recognition that single premium credit life and credit accident and health insurance gives insurers the use of a customer's entire premium, often over several years. The applicable discount factor is to be used to derive presumptive rates for all single premium plans (see Appendixes B and C). As a result of the application of the discount factor, the single premium presumptive rates will vary by the number of months of coverage.
Companies who are using policy forms that have been previously approved are not required to re-file those forms. However, all companies are required to file the new rates to be charged on and after April 1, 2000 with the Department. This may be accomplished by submitting rate schedules that clearly indicate that such rates comply with the Commissioner's Order. This filing should identify each policy form number, the date approved, and the rates to be used as of April 1, 2000.
Rate deviations currently in place are allowed to continue pursuant to 28 TAC § 5.601 et seq.
| All rate filings should be submitted to: | Filing Intake Division, Mail Code 106-1E Texas Department of Insurance P O Box 149104 Austin, TX 78714-9104 or 333 Guadalupe Austin, TX 78701 |
Questions regarding this bulletin or credit rate filings in general should be directed to the undersigned at 512-322-3401 or at our e-mail address LifeHealth@tdi.state.tx.us .
Sincerely,
_________________________________
Ana M. Smith-Daley
Deputy Commissioner
Life/Health Division