Cal. Code Regs. Tit. 22, § 58066 - Provisions Governing Premiums When Benefits Increase or Decrease

(a) The extra premiums for the optional rider(s) that add a Shortened Benefit Period Non-Forfeiture Benefit described in Section 58059 (l) and/or that increase the amounts of the covered benefits of the Policy or Certificate as provided in Section 58061(a)(1)(2) and (3) shall be in the same form as the original Policy--either remain level for the life of the Policy or increase annually at no more than five percent (5%). The extra premiums for the optional rider(s) may be based on the attained age of the Policy or Certificate holder at the time the rider is elected. Premiums for the optional riders shall be filed and approved by the Department of Insurance at the time rates are filed initially. For the optional riders allowed in Section 58061(a)(1) and (2), the premiums for each additional $10 unit of a covered benefit shall be the rate that corresponds to the current attained age of the Policy or Certificate holder as such rates were filed initially and approved by the Department of Insurance. For the optional riders allowed in Section 58061(a)(3), the premium for the increase in the lifetime maximum benefit shall be the difference in premiums between the new lifetime maximum benefit elected and the lifetime maximum benefit of the current Policy or Certificate, based on the rates filed initially and approved by the Department of Insurance and the current attained age of the Policy or Certificate holder. The premium for the underlying coverage of the original Policy or Certificate shall not be changed by the addition of one or more riders and shall continue to be based on the age of the Policy or Certificate holder on the date when the original Policy or Certificate was issued or delivered.

(b) When an Issuer replaces a non-Partnership or a Partnership Policy or Certificate it has previously issued with either a new non-Partnership or Partnership Policy or Certificate, the Issuer shall recognize past insured status by granting a premium credit that meets the requirements of Insurance Code 10234.87, and satisfies the following conditions:

(1) a credit equal to or not less than five percent (5%) of the premium for the original policy or certificate for each full year the original policy or certificate was in force shall be given toward all subsequent premium payments for the replacement policy or certificate. However, the cumulative credit allowed need not exceed fifty percent (50%).

(2) no credit need be provided if a claim has been filed under the original policy or certificate. The cumulative credits allowed need not reduce the premium for the replacement policy to less than the premium for the original policy or certificate. No credit need be provided if there is no difference between the premium for the replacement policy or certificate and the premium for the current policy or certificate.

(c) The premium when a Partnership Policy or Certificate holder elects to reduce the coverage of the original Policy or Certificate as provided in Section 58061(c)(1)(2) and (3) will be calculated as follows:

(1) the premium will be based on the reduced amount of coverage elected and the age of the Policy or Certificate holder at issue age; and

(2) the premium reductions from the change in coverage shall be applied toward all future premium payments.

(d) Self-funded Issuers not subject to compliance with the California Insurance Code are exempt from the requirements of Subsection (a), above, that premiums for the optional riders be submitted to and approved by the Department of Insurance.

Notes

Cal. Code Regs. Tit. 22, § 58066

1. New section filed 8-30-93 as an emergency; operative 8-30-93 (Register 93, No. 36). Submitted for printing only pursuant to section 22009, Welfare and Institutions Code.
2. Certificate of Compliance as to 8-30-93 order, including repealer of subsection (a) and subsection relettering, amendment of newly designated subsections (b)(1) and (c)(2), and new subsection (d) transmitted to OAL 12-30-93 and filed 1-28-94 (Register 94, No. 4).
3. Amendment filed 10-1-98 as an emergency; operative 10-1-98. Submitted to OAL for printing only pursuant to Welfare and Institutions Code section 22009(d) (Register 98, No. 41). A Certificate of Compliance must be transmitted to OAL by 1-29-99 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 10-1-98 order transmitted to OAL 1-28-99 and filed 3-15-99 (Register 99, No. 12).

Note: Authority cited: Section 22009(a), Welfare and Institutions Code. Reference: Section 22005, Welfare and Institutions Code.

1. New section filed 8-30-93 as an emergency; operative 8-30-93 (Register 93, No. 36). Submitted for printing only pursuant to section 22009, Welfare and Institutions Code.
2. Certificate of Compliance as to 8-30-93 order, including repealer of subsection (a) and subsection relettering, amendment of newly designated subsections (b)(1) and (c)(2), and new subsection (d) transmitted to OAL 12-30-93 and filed 1-28-94 (Register 94, No. 4).
3. Amendment filed 10-1-98 as an emergency; operative 10-1-98. Submitted to OAL for printing only pursuant to Welfare and Institutions Code section 22009(d) (Register 98, No. 41). A Certificate of Compliance must be transmitted to OAL by 1-29-99 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 10-1-98 order transmitted to OAL 1-28-99 and filed 3-15-99 (Register 99, No. 12).