1. (a) Single and monthly premiums for single disability coverage of Closed End loans, where coverage extends for a period measured from the inception of coverage, are computed as follows:

   SP (for the term of coverage) x (Total of covered

   Single Premium

   =

   disability benefit payments)

   $1000

   MP (for the initial term of coverage) x (Scheduled

   Monthly Premium

   =

   total of covered disability benefit payments

   for Month “t”

   remaining on Month “t”)

   $1000

   Where SP and MP are taken from the lettered Subtable, corresponding to the Class of Business, of TABLE 2 in § 2248.47.

2. (b) Prima facie monthly premiums for single Open End disability coverages (“Credit Union Open End”, “Line of Credit” and “Credit Card”) are computed as follows:

   Monthly Premium = MP X

   Ins^t

   1000

   Where:

   MP is the Open End Monthly Premium per $1000 of outstanding principal balance (not including unearned finance charges) from TABLE 3 in § 2248.47.

   Ins^t is the outstanding principal balance of the debt outstanding for month “t” (not including unearned finance charges) or the amount for month t provided for in the policy or certificate, if less.

   The balance to which the rate is applied may be computed on the same basis as that used to compute interest charges on the debt.

3. (c) Prima facie premium rates for “Critical Period Disability” coverage, as provided for in Article 6.7, shall be actuarially equivalent to the prima facie disability rates for the corresponding coverage under subsections (a) and (b) and shall be approved by the Commissioner pursuant to § 2248.43.
4. (d) Prima facie rates for “Joint Disability” coverages are computed by multiplying the appropriate single disability rates by 1.6.

Note: Authority cited: Sections 779.21 and 779.36, Insurance Code. Reference: Sections 779.9, 779.13, 779.16 and 779.36, Insurance Code; Sections 18191, 18290 - 18292, 22458.1, 22458.2, 24458.1 and 24458.2, Financial Code; and Credit Insurance General Agents Association v. Payne, (1976) 16 Cal.3d 651.

History

1. New section filed 4-14-94; operative 5-16-94. Submitted to OAL for printing only pursuant to Government Code section 11343(a)(1) (Register 94, No. 15).

2. Amendment of subsection (b) filed 1-9-2002; operative 1-9-2002. Submitted to OAL for printing only pursuant to Government Code section 11340.9(g) (Register 2002,, No. 2).