3 AAC 28.340. Credit life insurance rates

(a) The prima facie rates for credit life insurance with standard coverage written on the insured portion of a debt are as follows:

(1) if the premium is payable on a monthly outstanding balance basis, $.57 per month per $1,000 of outstanding insured net debt on single life and $.88 per month per $1,000 of outstanding insured net debt on joint life;

(2) if the premium is payable on a single premium basis, the rate must be computed according to the following formula or according to a formula approved by the director that produces rates substantially the same as those produced by the following formula:

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where Sn is the single premium per $100 of initial outstanding insured net debt, Op is the prima facie credit life insurance premium rate for monthly outstanding balance coverage that is not written on an open-end credit basis under (1) of this subsection, n is the number of months in the term of the insurance, i is the monthly loan interest rate, and an is an annuity with term n at interest rate i.

(b) The rates must be adjusted to be actuarially consistent with the rates in (a) of this section if

(1) rates are applied to or benefits are for an amount other than the outstanding insured net debt;

(2) benefits are not those described in 3 AAC 28.335 for standard coverage; or

(3) benefits are for a term that differs from the term of the loan.

History: Eff. 3/29/81, Register 77; am 6/6/93, Register 126; am 7/2/2001, Register 158; am 7/4/2001, Register 158

Authority: AS 21.06.090

AS 21.57.080

AS 21.57.130

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