(d) Coverage may be offered at the insurer's option, based on either the monthly
outstanding balance basis or single premium basis.
(e) The joint credit life rate on the basis specified in subdivision (a), (b), or (c) of this
subrule shall be 1.5625 times the specific rate for that type of coverage.
(f) A combination of the appropriate rate for level term and the appropriate rate for
decreasing term, with equal decrements, shall be used if coverage provided is a combination of
level term and decreasing term, with equal decrements.
(g) If the benefits provided are other than those described in subdivisions (a) to (f)
of this subrule, rates for such benefits shall be actuarially consistent with the rates provided in
subdivisions (a), (b), (c), and (e) of this subrule.
(2) In connection with indebtedness that is repayable over a period of more than 120
months, when written on a single premium basis, the premium or other identifiable charge for
credit life insurance shall be calculated to insure the scheduled amount required to liquidate
the indebtedness, exclusive of any unearned interest or finance charge. In connection with
indebtedness that is repayable over a period of more than 120 months, when written on a
monthly outstanding balance basis, the premium or other identifiable charge for credit life
insurance shall be calculated to ensure the actual amount required to liquidate the
indebtedness, exclusive of any unearned interest or finance charge.
(3) The premium rates in subrule (1) of this rule shall apply to all policies which
provide credit life insurance, which are issued with or without evidence of insurability,
which are offered to all eligible debtors, and which do not contain any of the following:
(a) Exclusions, other than suicide within 1 year of the incurred indebtedness.
(b) Age restrictions, other than age restrictions that make debtors who are 71 or over
ineligible for initial or continued coverage.
(c) An actively at work test other than one which requires that a debtor is or has been, for
the previous 2 weeks, either regularly working a 30-hour week or more or is able to do
so.
(4) Any underwriting decision shall be made within 60 days of the application for
insurance. An insurer shall not engage in post-claim underwriting.
(5) The premium rates in subrule (1) of this rule shall also apply to all policies which
provide credit life insurance, which are to
be
issued without underwriting, except
underwriting that is based upon age, and which do not contain any of the following:
(a) Age restrictions, other than age restrictions that make debtors who are 71 or over
ineligible for initial or continued coverage.
(b) A provision excluding or denying a claim for death resulting from preexisting
conditions, except for those conditions for which the insured debtor received diagnosis or
treatment within 6 months preceding the effective date of the debtor's coverage and which
caused loss within the 6 months following the effective date of the coverage.
(6) A preexisting conditions exclusion permitted by subrule (5) of this rule shall apply
only to accumulated indebtedness of more than $1,000.00 and where the diagnosis identified
the condition.
History: 1987 MR 6, Eff. Sept. 1, 1987; 1995 MR 1, Eff. Feb. 3, 1995.
Editor's note: The rules of the Insurance Bureau, Department of Commerce, entitled "Credit Insurance
Rates, Forms, and Standards," being R 550.101 to R 550.121 and appearing in Issue No. 6 of the 1987
Michigan Register, are renumbered R 550.201 to R 550.221.
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