§ 2248.32. Presumptive Loss Ratios and Prima Facie Rates, Generally.

(a) The Presumptive Loss Ratios (PLRs) for credit life insurance coverage and for credit disability insurance coverage shall be those indicated below. For the purpose of Insurance Code § 779.9 it shall be presumed that benefits provided in a policy or certificate are not reasonable in relation to the premium charge if the claims incurred thereunder cannot be reasonably expected to equal the PLR below of the premiums earned separately thereunder for credit life insurance or for credit disability insurance.

The PLRs are shown in the table below:

Credit Life Insurance	Class	Single life	Joint life
Closed End	A-E	54.47%	54.24%
Open End Line of Credit	A,B,D,E	54.71%	54.31%
Credit Card	A,B,D,E	54.71%	54.31%
Credit Union Open End	C	54.60%	54.35%
Credit Union Credit Card	C	54.60%	54.35%
Credit disability Insurance	A	58.73%	73.41%
	B	56.34%	70.43%
	C	59.13%	73.91%
	D	59.64%	74.58%
	E	54.91%	68.64%

Note the PLR can be expressed as 56.34% or .5634 when used in a formula.

(b) The prima facie rates set forth in these regulations:

(1) Assume that identical coverage (including maximum amounts and terms of coverage) is offered or provided to all debtors of age 65 or less, and Open-end coverages typically terminate at age 65;

(2) Assume that coverages are subject to the limitations and eligibility standards established for standard policy forms in Article 6.9 of this Subchapter.

(c) Rates computed as set forth in these regulations may be rounded to the nearest cent.

(d) The Commissioner waives the filing under Insurance Code § 779.8 of premium rate schedules conforming to the rates set forth in these regulations when such schedules are used with the standard policy and certificate forms set forth in Article 6.9.

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 (a) filed 10-2-2001; operative 10-1-2001. Submitted to OAL for printing only pursuant to Government Code section 11340.9(g) (Register 2001, No. 40).

3. Editorial correction of subsection (a) (Register 2001, No. 49).

4. Amendment of subsections (a) and (b)(1) 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).

Note

Note: Authority cited: Sections 779.21 and 779.36, Insurance Code. Reference: Sections 779.8, 779.9, 779.13 and 779.16, Insurance Code; Sections 18290, 22458.1 and 24458.1, Financial Code; and Credit Insurance General Agents Association v. Payne, (1976) 16 Cal.3d 651.