§ 58-57-45. Credit accident and health insurance rate standards. - North Carolina Statutes

§58‑57‑45.  Credit accident and health insurance rate standards.

(a)        The rate standardsset forth below shall be applicable for contracts which contain a provisionexcluding or denying claim for disability resulting from preexisting illness,disease or physical condition, for which the debtor received medical advice,consultation, or treatment within the six‑month period immediatelypreceding the effective date of the debtor's coverage and if said disabilityoccurs within the six‑month period immediately following such date, butcontain no other provision which excludes or restricts liability in the eventof disability caused in a certain specified manner, except that they maycontain provisions excluding or restricting coverage in the event of normal pregnancy;intentionally self‑inflicted injuries; sickness resulting fromintoxication, addiction to alcohol or narcotics, or from the use thereof unlessadministered on the advice of a physician; flight in nonscheduled aircraft;war; military service; and may contain the same age restrictions as thosementioned for credit life insurance in G.S. 58‑57‑40. Provided, ifthe indebtedness is paid by renewal or refinancing prior to the scheduledmaturity date, the effective date of the coverage with respect to any policyprovision shall be deemed to be the first date on which the debtor becameinsured under the policy covering the original prior indebtedness that wasrenewed or refinanced, at least to the extent of the amount and term of thecoverage outstanding at the time of renewal and refinancing of the debt.

(b)        A policy of creditaccident and health insurance shall include a definition of"disability" providing that during the first 12 months of disabilitythe insured shall be unable to perform the duties of his occupation at the timethe disability occurred (or his previous occupation if the person is unemployedor retired at the time the disability occurs), and thereafter the duties of anyoccupation for which the insured is reasonably fitted by education, training,or experience.

(c)        Any policy to whichthe rates below apply may require the debtor to be gainfully employed on theeffective date of the insurance. Provided, however, that unless the insuredwrites the name of his employer on the application and signs a statement thathe is employed, there shall be no denial of claims grounded on the insured'sfailure to be employed on the effective date of the insurance.

(d)        If premiums arepayable in one sum in advance for the entire duration of the indebtedness, forinsurance with a preexisting exclusion as defined above, the following premiumsare authorized:

Single Premium Rates per $100.00 of Initial

Insured Indebtedness

No. of Months              NonretroactiveBenefits                           Retroactive Benefits

in which

Indebtedness              14‑Day                   30‑Day               7‑Day         14‑Day          30‑Day

is

Repayable

      12                         1.40                             .95                 2.60                 2.10             1.40

      24                         1.90                           1.40                 3.50                 2.85             1.90

      36                         2.40                           1.90                 4.35                 3.65             2.40

      48                         2.85                           2.40                 5.25                 4.40             2.85

      60                         3.35                           2.85                 6.10                 5.20             3.35

      72                         3.85                           3.35                                         5.95             3.85

      84                         4.30                           3.85                                         6.70             4.30

      96                         4.80                           4.30                                         7.50             4.80

    108                         5.25                           4.80                                         8.25             5.25

    120                         5.75                           5.25                                         9.00             5.75

For terms other than theabove, premiums shall be prorated.

(e)        For policies forwhich monthly premiums are charged on a basis of the then‑outstandingbalances, a monthly premium per one thousand dollars ($1,000) of outstandingbalances is authorized, based on the following formula:

Opn      =       20           SPn

______________________

            n    +    1

where SPn = Singlepremium rate per one hundred dollars ($100.00) of initial indebtednessrepayable in n equal monthly installments.

Opn    =   Monthly outstanding balance premium rate per one thousand dollars ($1,000).

       n   =   Original repayment period, in months.

(e1)      Notwithstanding thepremium rates otherwise set forth in this section for credit accident andhealth insurance, the premium rates for such insurance written in connectionwith direct loans with contractual commitments of more than 10 years' durationshall be filed with and approved by the Commissioner.  Such premium rates shallexhibit a reasonable relationship to the benefits provided.

(f)         Premium ratestandards for other benefit plans and for indebtedness repayable ininstallments other than as indicated above shall be actuarially consistent withthe above rate standards.

(g)        In addition to thepremium rate authorized, a charge may also be made for a nonrefundableorigination fee per credit accident and health insurance transaction as setforth below:

InsuredIndebtedness                         Fee Permitted

lessthan $250.00                                      none

$250.00or more but                                $1.00

    lessthan $500.00

$500.00or more                                     $3.00

No third or subsequent originationfee may be charged in connection with a third or subsequent refinancing withinany twelve‑month period.

(h)        The premium ratesfor joint accident and health coverage shall not exceed one and two‑thirds(1 2/3) times the permitted single accident and health rate. (1975,c. 660, s. 1; 1981, c. 759, ss. 2, 4‑6, 9; 1987, c. 826, ss. 6, 7, 14;1993, c. 226, s. 8.)