Ga. Comp. R. & Regs. R. 120-2-27-.03 - Credit Life Insurance Rates
The following standards shall be observed and followed in the use of Credit Life Insurance Forms in this state:
(a) All credit life insurance forms used in
this state shall contain schedules of premium rates to be charged in connection
therewith which:
1. are reasonable in relation
to the benefits and coverage provided; and
2. are neither excessive nor inadequate, nor
shall they be unfairly discriminatory.
(b) No credit life insurance form shall be
used in this state which contains a schedule of premiums in excess of the
applicable premium rates contained in the following subparagraphs 1., 2., and
3., and approval of all credit life insurance forms heretofore given is hereby
withdrawn:
1. For decreasing term credit life
insurance, where the insured indebtedness is repayable in substantially equal
installments during the term of the coverage, and the premium rate is based on
initial insured indebtedness, a single premium of $.45 per annum, per $100.00
of initial insured indebtedness. For premiums not based on initial insured
indebtedness, a monthly premium rate of $.70 per $1,000.00 of outstanding
insured loan balance.
2. For net
decreasing term credit life insurance, where the premium is not based on the
initial insured indebtedness, the rate charged shall not exceed $.70 per month
per $1,000, and the single premium shall not exceed the premium as calculated
using the formula illustrated in Exhibit A of this Regulation.
3. For level term credit life insurance, a
single premium rate of $.84 per annum, per $100.00 of initial insured
indebtedness.
4. Single premiums
for credit life insurance covering joint lives on either of the bases in
subparagraph 1., 2., or 3. of this rule shall not exceed 150 percent of the
appropriate single life rate specified in subparagraph 1., 2., or 3. of this
rule.
(c) Any agency
agreement or agency contract for the payment of any commissions, service fees,
or other forms of compensation of any kind, directly or indirectly, to any
agent or broker for the writing of credit life insurance in this state may not
provide for all such payments in the aggregate to exceed twenty-five percent
(25%) of the net written premium. For the purpose of this Rule, the term "net
written premium" shall mean gross written premium minus refunds due to
terminations of coverage.
(d) Any
agency agreement in effect prior to the effective date of this regulation,
providing for the additional payment of commissions above the 25% soliciting
commissions for credit life policies written or credit life certificates issued
prior to the effective date of this regulation, shall remain in effect for
coverage commencing prior to March 1, 1993.
(e) The term "initial insured indebtedness"
shall mean the total payments as that term is defined under the Federal
Consumer Credit Protection Act. This Act defines the 'total of payments' as the
amount you will have paid when you have made all scheduled payments.
Notes
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