Wyo. Code R. 044-0002-52
General Agency, Board or Commission Rules
Chapter 52: Credit Life and Disability Insurance
Effective Date: 12/31/1996 to Current
Rule Type: Current Rules & Regulations
Reference Number: 044.0002.52.12311996
These regulations pertaining to Credit Life and Disability Insurance supplement the provisions of Chapter 21, Wyoming Insurance Code. They are promulgated by authority of and pursuant to the Wyoming Administrative Procedure Acts 16-3-101 et seq. and to the Wyoming Insurance Code W.S. 26-2-110, 26-2-125, 26-13-101 et seq., 26-21-101 et seq.
The purpose of these rules is: to aid in the effectuation of Chapter 21, Wyoming Insurance Code pertaining to Credit Life and Disability Insurance, to limit commissions, to provide for filing of premium (rates), to furnish certain statistical information and to define certain unfair methods of competition and unfair trade practices.
As used herein, the following terms are thus defined:
(a) 'Experience dividend or refund' is a form of commission whereby an agent of the insurer receives, directly or indirectly, money or any other thing of value in lieu of or in addition to a lawful agent's commission by reason of the mortality or morbidity experience of the insurer, or the profit of the insurer, by whatever means arrived at, on the insurer's policies sold by said agent.
(b) 'Creditor agent' means a creditor, as defined herein, who is also an appointed agent of an insurer.
(c) 'General agent' means a duly appointed agent of the insurer who is an independent contractor on behalf of an insurer and who services and supervises other duly appointed agents of the insurer pursuant to an agreement with the insurer, and who is not affiliated in any way with a creditor or creditor agent, other than as a supervisor thereof. No 'general agent' shall be a partner, firm member, associate, joint venturer, stockholder, corporation officer, director or employee of a 'creditor agent' nor shall the converse be allowed.
(i) 'Person' shall have the meaning set forth in W.S. 26-1-102(a)(xx).
A creditor may remit and an insurer may collect premiums on a monthly balance basis if the insurance charges or premiums are not added to the amount of the loan and do not constitute part of the outstanding indebtedness, or if no direct or indirect, interest, finance, carrying, credit or service charges are made to the debtor in connection with the insurance charges or premiums. In those instances in which identifiable insurance charges or premiums are added to the total amount of indebtedness and direct or indirect interest, finance, carrying, credit or service charges are made thereon, the creditor shall at the time of imposition of such additional interest or other charge be deemed to have loaned the insur- ance charges or premiums to the debtor and the premiums shall be deemed collected for the insurer at the time they are added to the indebtedness, in which event the creditor shall remit and the insurer shall collect on a single premium basis only.
In addition to those matters referred to in W.S. 26-21-107(b), in passing upon premium or rate filings, the Insurance Commissioner will give consideration to available mortality and morbidity data pertaining to the debtors of a creditor of a class or classes of debtors of a creditor, previous experience, if any, for an actuarially credible period on such creditor's debtors, including the experience of any subsidiary or affiliate of the creditor, available age data and a reasonable rate of expense. Age data and prior experience of the creditor's program should always be submitted.
Commissions or other payments, credits, dividends or allowances to creditors, agents or general agents shall not be considered a justification, or any part of a justification, of a higher premium as being reasonable in relation to benefits.
Notwithstanding Section 5 of these rules, the following rates for credit life and credit disability insurance will be deemed to be acceptable without the submission of substantiating data:
| Non-Retroactive Benefits | Retroactive Benefits | ||||
|---|---|---|---|---|---|
| 14-Day | 30-Day | 7-Day | 14-Day | 30-Day | |
| 12 | $1.40 | $.80 | $3.00 | $2.20 | $1.70 |
| 24 | 2.20 | 1.60 | 4.00 | 3.00 | 2.50 |
| 36 | 3.00 | 2.40 | 5.00 | 3.80 | 3.30 |
| 48 | 3.50 | 2.90 | 5.70 | 4.30 | 3.80 |
| 60 | 3.90 | 3.30 | 6.30 | 4.70 | 4.20 |
| 72 | 4.30 | 3.70 | 6.90 | 5.10 | 4.60 |
| 84 | 4.70 | 4.10 | 7.50 | 5.50 | 5.00 |
| 96 | 5.10 | 4.50 | 8.10 | 5.90 | 5.40 |
| 108 | 5.50 | 4.90 | 8.70 | 6.30 | 5.80 |
| 120 | 5.90 | 5.30 | 9.30 | 6.70 | 6.20 |
Premiums payable on other than a single premium basis, or for indebtedness of monthly durations not shown above, or for benefits on a basis different from those illustrated above, shall be actuarially consistent with the above rates. The above rates are premised upon a pre-existing condition exclusion in the policy not to exceed twelve (12) months.
(h) An insurer which owns or controls, or is owned or controlled by, a creditor, shall be exempt from the provisions of Section 5 of these rules only if its rates for credit disability coverages are at least ten (10) percent lower than those otherwise permitted by subsection f.
(i) For the purposes of this section, “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management or the policies of an insurer or creditor whether through ownership or voting securities, by contract or otherwise. Control shall be rebuttably presumed for purposes of stock ownership if ten (10) percent or more of the voting securities of an insurer are constructively owned by a creditor or vice versa. All rate filings shall certify the status of the insurer in respect to its creditor affiliations.
W.S. 26-21-109(b) Wyoming Insurance Code requires that refund formulae be filed with and approved by the Commissioner. No refund formula may be utilized unless it is at least as favorable to the insured debtor as a formula providing a pro rata refund of premium. In no event need a refund or credit be made if the amount thereof is less than one dollar.
The following practices, when engaged in by insurers or agents in connection with the sale or placement of credit life, disability insurance, or as an inducement thereto, shall be considered to constitute “unfair methods of competition” and “unfair trade practices” within the meaning of W.S. 26-13-101 et seq. and are prohibited:
(a) The offer or grant by an insurer to a creditor of any special favor or advantage not set out in the insurance contract other than the payment of agents’ commissions.
(b) Agreement by an insurer to deposit with a bank or financial institution money or securities of the insurer with the design or intent that the same offset or take the place of a deposit of money or securities which otherwise would be required of the creditor by such bank or financial institution as a compensating balance or offsetting deposit for a loan or other advancement.
(c) Deposit by an insurer of money or securities without interest or a lesser rate of interest than is currently being paid other depositors with a creditor bank or financial institution. This prohibition shall not be construed to prohibit the maintenance by an insurer of such demand deposits as are reasonably necessary for use in the ordinary course of business of the insurer.
(d) Premiums received by a creditor or agent must be paid to the insurer within forty-five (45) days of the end of the month in which they are received.
Each insurer writing credit life or credit disability insurance within this state shall keep and maintain statistical data of its experience on these kinds of insurance. The insurer shall, on or before the first day of June of each year, file with the Insurance Commissioner its statistical experience data for the year ending December 31st immediately preceding. Such experience shall be reported on forms conforming to those now or hereafter from time to time adopted by the National Association of Insurance Commissioners.
No experience dividend or refund shall be paid to any agent of the insurer, directly or indirectly, in lieu of or in addition to a lawful agent's commission. Nothing herein shall prohibit the payment of an experience dividend or refund to persons from whom premium is ultimately derived in accordance with W.S. 26-13-111, W.S. 26-17-124 and W.S. 26-19-105.
No insurer shall pay compensation, either directly or indirectly, in excess of thirty percent (30%) of the net written prima facie premium to any creditor agent, nor in excess of seven and one-half percent (7 ½%) of the net written prima facie premium to any general agent. Prima facie premium means premium using the premium rates set forth in Section 6 of this regulation or actuarially consistent premium rates for plans not described in Section 6.
Compensation, as used in this regulation, means any valuable consideration, in whatever form, direct or indirect, paid by or on behalf of any insurer or any person to any other person directly or indirectly benefitting a creditor, creditor agent or general agent as a result of or having any connection to any credit transaction excluding dividends or the share of profits earned by any person other than the creditor or general agent of an insurer on account of that person's ownership interest in an insurer which has assumed any credit life or disability risks from another insurer pursuant to a reinsurance agreement.
In order to assist in the enforcement of this rule, any licensed agent and an officer of any insurer writing credit life or credit disability insurance in this state shall on January 1, 1990, and on the same date of each year thereafter, file with the Commissioner a notarized affidavit stating whether or not the insurer or agent has paid or received compensation in excess of the limits set forth herein.
In the event the rates charged by an insurer are higher than the rates specified in Section 6 of these rules, the aggregate monetary amount of all compensation to any person shall not exceed that which would have been payable had the rates set forth in said Section 6 been charged.
In all cases where an insurer has assumed credit life and disability risks from another insurer pursuant to a reinsurance agreement:
(a) The offer or grant by an insurer to a creditor of any special favor or advantage not set out in the insurance contract other than the payment of agents' commissions is prohibited.
(b) No insurer shall reinsure any Wyoming risks with any insurer who is not authorized to transact insurance in one or more states and having surplus to policyholders in an amount not less than the paid in capital stock and surplus required under W.S. 26-3-108.
(c) In addition to the statistical experience data required in the annual report, each insurer shall submit complete copies of all reinsurance treaties or contracts covering Wyoming risks as well as information showing how much reinsurance is in force on each Wyoming risk and in what company.
This regulation shall become effective July 1, 1980. No form or rate approved prior to the effective date of this regulation shall be used in this state after 1 September 1980, except that insurers whose premium rates do not exceed those rates set forth as being prima facie acceptable in Section 6 of this regulation may continue to use such conforming rates.
All extensions, renewals, reissues, replacements, addenda, endorsements or other modifications of existing group credit insurance contracts or forms shall be made to conform to the requirements of these regulations.
The amendments to Sections 3(i), 6(f), 6(g), 10, 10(b), 10(c) are effective when filed.
If any section or portion of a section of these rules or the applicability thereto to any person or circumstance is held invalid, the invalidity shall not affect other provisions or application of these rules and regulations which can be given effect without the valid provision or application, and to these ends the rules are severable.