§ 2248.39. Test for Deviated Rates.

(a) An insurer shall use life insurance rates and disability insurance rates lower than the prima facie rates for an experience group if the credibility adjusted loss ratio for that group is equal to or less than the Presumptive Loss Ratio (PLR) less .05.

(b) An insurer may use life insurance rates and disability insurance rates higher than the prima facie rates for an experience group when the credibility adjusted loss ratio for that group equals or exceeds PLR + .05.

(c) For the purpose of applying this Section to life insurance and disability insurance, credibility adjusted loss ratios shall be computed according to § 2248.40(c) for the most recent experience period, based upon the applicable prima facie rates for the experience group.

(d) Rates which are lower or higher than the prima facie rates shall not exceed the new case rates for the experience group computed according to § 2248.40 and shall be administered pursuant to § 2248.41 or § 2248.42, respectively. Rates shall be calculated and applied separately for life and for disability.

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 section and Note 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).

Note

Note: Authority cited: Sections 779.21 and 779.36, Insurance Code. Reference: Sections 779.9, 779.13, 779.16 and 779.36, Insurance Code; Sections 18191, 18290-18292, 22314, 22315 and 22455, Financial Code; and Credit Insurance General Agents Association v. Payne, (1976) 16 Cal. 3d 651.