PURPOSE: This regulation establishes uniform cancellation procedures to be followed by credit insurers pursuant to the provisions of sections 374.045 and 385.050, RSMo.

1. (1) Refunds on policies or certificates of decreasing term credit life and credit accident and sickness shall be determined by using the sum of the digits formula.
2. (2) Refunds on policies or certificates of level term credit life insurance shall be determined by using a pro rata formula.

3. (3) The number of months for which a premium is earned shall be calculated as follows:

   1. (A) The first month’s premium may be considered as earned on the first day of coverage; and

   2. (B) For cancellations occurring in subsequent months of coverage, each of which shall be deemed to commence on the coverage anniversary date in each successive month and end upon the date immediately preceding the next anniversary date, an insurer shall adopt either of the following procedures:

      1. 1. Consider no premium to be earned

until the sixteenth day of the month of coverage at which time it may consider all premium to be earned for that period; or

1. 2. Consider premium to be earned on a

daily basis within the month of coverage.

1. (4) Any refund of premium shall be paid or credited to the person entitled to it immediately at the time of cancellation, provided however that a refund of less than one dollar ($1) need not be made.

AUTHORITY: sections 374.045 and 385.070, RSMo 1986. This rule was previously filed as 4 CSR 190-13.180. Original rule filed April 11, 1979, effective Aug. 11, 1979.

*Original authority: 374.045, RSMo 1967 and 385.070, RSMo 1977, amended 1983, 1991, 1992.