6.6.1101    CREDIT LIFE INSURANCE -- ACCEPTABLE RATES

(1) Except as may otherwise be provided in this subchapter, the following rates for credit life insurance may be considered "prima facie acceptable rates" for purposes of 33-21-205, MCA.� Rates which are filed by any company for the indicated coverage will be considered acceptable without substantiating data if they do not exceed these premium rates:

(a) If premiums are payable on a monthly outstanding balance basis the rate is $.80 per month per $1,000 of outstanding insured debt on single life and $1.40 per month per $1,000 of outstanding insured debt on joint life.

(b) If the premium is charged on a single premium basis, the rate must be computed according to the following formula or according to a forumla approved by the commissioner which produces a rate which is substantially the same as the rate produced by the following formula:

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S_p = Single premium rate per $100 of initial credit life insurance coverage.

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O_p = $.80, the prima facie credit life insurance premium rate for monthly outstanding balance coverage from (1).

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I_t = The scheduled amount of insurance for month t.

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I_i = Initial amount of insurance.� For a net insurance policy, I_i equals the initial principal balance of the loan.

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dis = .0036, representing an annual discount rate of 4% for the interest plus .4% for mortality.

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n = The number of months in the term of the insurance.

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(c) The premium rate for joint credit life coverage must not exceed 1.75 times the permitted single credit life rate.

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(2) An insurer may at any time charge a rate which is less than the basic maximum rate set forth above.

History: 33-21-111, MCA; IMP, 33-21-205, MCA; NEW, Eff. 4/4/75; AMD, 1978 MAR p. 887, Eff. 10/15/78; AMD, 1993 MAR p. 2764, Eff. 11/25/93; AMD, 1996 MAR p. 2157, Eff. 6/21/96.