69O-163.009. Determination of Reasonableness of Benefits in Relation to Premium Charge  

Effective on Thursday, August 15, 2019
  • 1(1) Section 3627.682, F.S., 5requires that benefits provided by credit insurance policies must be reasonable in relation to the premium charged. This requirement is satisfied if the premium rate charged develops or may be reasonably expected to develop a loss ratio of claims incurred to premiums earned of not less than:

    52(a) 55% for credit life insurance, and

    59(b) 50% for credit disability insurance.

    65(2) Use of rates not greater than those contained in rules 7669O-163.010 77and 7869O-163.011, 79F.A.C., (“prima facie rates”) shall be deemed premium rates reasonably expected to develop the required loss ratio. An insurer may only file and use rates with such forms which are greater than prima facie rates upon a satisfactory filing with the Office that the use of such rates will not result on a statewide basis for that insurer of a ratio of claims incurred to premiums earned of less than the required loss ratio.

    153(3) If an actual rate is greater than the prima facie rates, the actual rate may not exceed the prima facie rates plus the difference between:

    179(a) Claims which may be reasonably expected, and

    187(b) The product of the required loss ratio and the prima facie rate set forth for the coverage being provided.

    207(4) When some rates are based on subsection (1) above and others on the prima facie rate, the expected loss ratios of statewide business must meet the minimum loss ratio standard in subsection (1) above.

    242(5) Nonstandard Coverage. If any insurer files for approval of any form providing coverage more restrictive than that described in rules 26369O-163.010 264and 26569O-163.011, 266F.A.C., the insurer shall make a filing to demonstrate to the satisfaction of the Office that the premium rates to be charged for such restricted coverage comply with subsection (1) above or, are less than or equal to rates which are actuarially equivalent to the prima facie rates.

    314(6) Any deviation from prima facie rates shall require numerical and written justification. The numerical information shall be displayed as illustrated in Form OIR-B1-2213, Appendix A, Illustrative Experience Exhibit, effective 10/18, hereby incorporated by reference and available at 352http://www.flrules.org/Gateway/reference.asp?No=Ref-10584, 354and submitted electronically via the Office’s Filing Assembly Submission System (FASS) at https://iportal.fldfs.com/ifile/fass/default.asp.

    367Rulemaking 368Authority 369624.308(1), 370627.678 FS. 372Law Implemented 374624.307(1), 375627.678, 376627.682 FS. 378History–New 5-9-82, Formerly 4-7.09, Amended 6-11-91, Formerly 4-7.009, Amended 3-15-94, 2-11-03, Formerly 4-163.009, Amended 9-30-09, 8-15-19.