[27 Pa.B. 3796]
[Continued from previous Web Page] § 73.104. Life insurance and life insurance with TPD benefit.
(a) Life benefit plan. The prima facie premium rate standards referenced in § 73.106 (relating to life insurance rate standards) apply to a plan of credit life insurance benefits, if the plan provides the features in paragraphs (1)--(4). This plan shall be described in a group policy and group certificate or in an individual policy.
(1) Single life coverage or joint life coverage for all eligible debtors.
(2) A benefit payable upon death or upon TPD, if TPD coverage applies, subject to any maximum dollar amount of coverage specified in the group policy and group certificate or individual policy, equal to any of the following:
(i) The actual gross or net unpaid indebtedness at the time of death or commencement of TPD, in the case of a closed end loan for a group policy of credit life insurance or credit life insurance with a TPD benefit.
(ii) The greater of the scheduled gross or net unpaid indebtedness, or the actual gross or net unpaid indebtedness, at the time of death or commencement of TPD, in the case of a closed end loan for an individual policy of credit life insurance or credit life insurance with a TPD benefit.
(iii) The actual net unpaid indebtedness at the time of death or commencement of TPD, in the case of an open end loan.
(3) A coverage period equal to the lesser of the following:
(i) The term of the indebtedness remaining at the time coverage is elected.
(ii) The term of the indebtedness remaining at the time coverage is elected to the time the insured debtor attains an age at which the group policy and group certificate or individual policy provides for coverage to terminate.
(iii) The term of the indebtedness remaining at the time coverage is elected until truncated coverage terminates.
(4) If TPD coverage is provided, a definition of TPD requiring that the debtor be totally and permanently and continuously unable to engage in any occupation, employment or activity for compensation or profit, for which the debtor is suited by education, training or experience, according to the certification of a medical doctor. The medical doctor's certification may be waived by the insurer if the debtor has suffered the permanent loss of sight of both eyes, or the severance of both hands, both feet or of one hand and one foot.
(b) Alternate benefit plans. Insurers may offer credit life insurance benefit plans and credit life insurance with TPD benefit plans that differ from the plan described in subsection (a). An alternate plan shall be described in a group policy and group certificate, or in an individual policy, and shall conform to the standards of section 7(b) of the act (40 P. S. § 1007.7(b)) and the applicable standards of section 6 of the Group Life Insurance Law (40 P. S. § 532.6). The premium rate standards of § 73.106 apply to alternate benefit plans.
§ 73.105. Life insurance and life insurance with TPD benefit requirements.
A plan of credit life insurance or credit life insurance with TPD benefit and a group policy and group certificate or an individual policy describing the plan, shall comply with the following:
(1) Joint coverage.
(i) If joint life coverage with or without TPD benefit is provided, a group certificate or individual policy providing joint life coverage with or without TPD coverage shall be issued. Insurers may not issue two single life coverage group certificates or two single life individual policies.
(ii) The benefit payable in the case of simultaneous death or TPD of both insureds may not exceed the benefit that would be payable if coverage were provided on only one debtor.
(iii) The group policy and group certificate or individual policy shall make provision for whom any excess benefit will be paid in the event of the simultaneous death of the joint insureds.
(2) Continuation of coverage. If joint life coverage with or without TPD benefit is provided, and coverage on one of the insured debtors is terminated or voided, or a death claim is denied, for any reason other than for the termination of the indebtedness, any remaining eligible debtor's coverage shall continue and an equitable adjustment of premium shall be made. The remaining eligible debtor's coverage shall continue under a single life coverage group certificate or individual policy.
(3) Voiding coverage for ineligible age. If a debtor exceeds the eligibility age for coverage and has correctly stated age information in an application signed by the debtor, and if a group certificate or individual policy is issued, the insurer has the right during the debtor's lifetime to void coverage on the debtor, but only within 60 days from the date of issue of the group certificate or individual policy.
(4) Terminating coverage for ineligible age. When premiums are payable monthly based on the actual monthly outstanding balance, if a debtor who exceeds the age at which coverage is to terminate under a group certificate or individual policy has correctly stated age information in an application signed by the debtor, and premiums continue to be erroneously charged to the debtor, the insurer has the right to terminate coverage as of the next billing date.
(5) Reducing excess coverage. If an identifiable charge is erroneously made to a debtor for an amount of coverage that exceeds the maximum dollar amount of coverage specified in the group policy and group certificate or individual policy, the insurer has the right to reduce the amount of coverage to the appropriate amount specified in the group policy and group certificate or individual policy during the debtor's lifetime but only within 60 days from the date the identifiable charge is made to the debtor. If coverage is reduced, a refund shall be made of the difference between the actual amount charged and the appropriate amount that should have been charged.
(6) Contestability. A contestability provision may not be more restrictive than to provide that coverage on a debtor shall be incontestable after the group certificate or individual policy has been in force during the lifetime of the debtor for 2 years from the date of issue. Coverage shall be contested based only upon information contained in an insurance application signed by the debtor, a copy of which is furnished, not later than when coverage is contested, to the debtor, a secondary beneficiary, or other claimant.
(7) Equitable premium or benefit adjustment. A provision specifying an adjustment of premiums or of benefits, or of both, to be made if information relating to the age of a debtor has been fraudulently misstated shall be considered to be equitable if it places the debtor and the insurer in the position they would have been in had the age information been correctly stated. Adjustment may not be made unless the age information is contained in an application signed by the debtor, a copy of which is furnished, not later than the time the adjustment is made, to the debtor, a secondary beneficiary or other claimant.
(8) Premium payment basis.
(i) Premiums shall be payable by the debtor either on a monthly outstanding balance basis or on a single premium basis at issue. Single premium coverage may be written on closed end loans only if at least one of the following conditions applies:
(A) The term of the coverage is 75 months or less. However coverage written on lease transactions may exceed 75 months.
(B) The coverage is provided on a net unpaid indebtedness basis.
(ii) A group certificate or individual policy providing credit life insurance or credit life insurance with TPD benefit on a net unpaid indebtedness basis shall contain a disclosure of the annual percentage rate used in the calculation of the insured indebtedness.
(9) Renewal or refinancing. With respect to the renewal or refinancing of an existing insured indebtedness, the effective date of coverage on the renewed or refinanced indebtedness shall be the date on which the insurer originally insured the debtor with respect to the indebtedness that is renewed or refinanced.
(10) Truncated life coverage.
(i) Truncated credit life insurance and truncated credit life insurance with TPD benefit may be provided only in connection with loans or credit transactions that are for a term greater than 60 months.
(ii) The truncated coverage period shall be at least 60 months.
(iii) If truncated coverage is elected by a debtor, at the time of election of the insurance coverage the debtor shall be informed in writing of the term of the insurance coverage and that the coverage will terminate prior to the scheduled maturity date of the indebtedness.
(iv) A group certificate or individual policy providing truncated credit insurance coverage shall disclose both the term of the truncated insurance coverage and that the term of insurance coverage will terminate prior to the scheduled maturity date of the indebtedness. The termination disclosure shall appear in prominent print on the first page of the group certificate or individual policy.
(11) Preexisting exclusion disclosure. A group certificate or individual policy providing for a preexisting condition exclusion shall disclose the exclusion and its effects upon benefit payments. The preexisting condition exclusion disclosure shall appear in prominent type on the first page of the group certificate or individual policy.
§ 73.106. Life insurance rate standards.
(a) Prima facie rates. Premium rates for credit life insurance and credit life insurance with TPD benefit, as described in § 73.104(a) (relating to life insurance and life insurance with TPD benefit), may not exceed the prima facie premium rates referenced in this section and published in the Pennsylvania Bulletin, unless higher premium rates are approved under § 73.122 (relating to deviated rates). Premium rates for benefits that differ from those benefits described in § 73.104(a) may not exceed premium rates that are actuarially consistent with the prima facie premium rates referenced in this section and published in the Pennsylvania Bulletin.
(b) Symbols. The symbols used in this section have the following meanings:
(1) Et = amount at risk in month t per $1 of initial insured indebtedness.
(2) i = 4.5%, consisting of an interest discount of 4% and a mortality discount of .5%.
(3) LSPn = single premium prima facie premium rate per $100 of a level amount of insured indebtedness.
(4) n = coverage period in months.
(5) Op = monthly outstanding balance prima facie premium rate per $1,000 of outstanding balance.
(6) SPn = single premium prima facie premium rate per $100 of initial insured gross indebtedness, as defined in § 73.103 (relating to definitions), repayable in n equal monthly installments.
(7) NSPn = single premium prima facie premium rate per $100 of initial insured net indebtedness, as defined in § 73.103, repayable in n equal monthly installments.
(c) Debtor insurance charge. The amount charged a debtor by a creditor for credit life insurance or credit life with TPD benefit may not exceed the premium amount charged by the insurer, as computed at the time the charge to the debtor is determined.
(d) Monthly outstanding balance rates. If premiums are payable on a monthly outstanding balance basis, the monthly prima facie premium rate for credit life insurance on a single life shall be $.705 per $1,000 of outstanding balance, and shall be $.844 per $1,000 of outstanding balance for credit life insurance with TPD benefit on a single life.
(e) Gross single premium rates for full term coverage period.
(1) If premiums for decreasing insurance on the gross unpaid indebtedness for a full term coverage period are payable on a single premium basis, the single premium prima facie premium rates for credit life insurance on a single life and for credit life insurance with TPD benefit on a single life shall be calculated, except as provided in subsection (i), in accordance with the following formula:
(2) Gross single premium rates for full term coverage period calculated in accordance with the formula in paragraph (1) are published in the Pennsylvania Bulletin, for single life coverage and for single life coverage with TPD benefit.
(f) Gross single premium rates for limited term coverage period. If premiums for decreasing insurance on the gross unpaid indebtedness for a limited term coverage period are payable on a single premium basis, the single premium rates for credit life insurance on a single life and for credit life insurance with TPD benefit on a single life may not exceed premium rates that are actuarially consistent with the single premium prima facie premium rates published in the Pennsylvania Bulletin, except as provided in subsection (i).
(g) Net single premium rates. If premiums for decreasing insurance on the net unpaid indebtedness for a full term or limited period coverage period are payable on a single premium basis, the single premium prima facie premium rates for credit life insurance on a single life and for credit life insurance with TPD benefit on a single life shall be calculated, except as provided in subsection (i), in accordance with the following formula:
(h) Level single premium rates. If premiums are payable on a single premium basis for level term insurance, the single premium prima facie premium rates for credit life insurance on a single life shall be calculated, except as provided in subsection (i), in accordance with the following formula:
(i) Alternative single premium formula. Prima facie premium rates may be calculated for credit life insurance and credit life insurance with TPD benefit in accordance with the following formula:
(j) Joint rates. Prima facie premium rates for credit life insurance on a joint life with or without TPD benefit shall equal 175% of the prima facie premium rates for a single life benefit plan which is identical to the joint life benefit plan.
(k) Actuarially consistent rates. For credit life insurance or credit life insurance with TPD benefit offered on any other basis, prima facie premium rates shall be actuarially consistent with the rate standards of subsections (d)--(i).
(l) Adjustment of prima facie rates and loss ratio standards. By ____(Editor's Note: Blank refers to a date 3 years from adoption of this proposal) and at least every 3 years thereafter, the Department review the appropriateness of the prima facie premium rates referenced in this section based upon Commonwealth experience data for the preceding 3 calendar years. The nonclaim element of the prima facie premium rates will not be adjusted unless an adjustment is necessary under subsection (m). An adjustment to the prima facie premium rates will not be made if the change in prima facie premium rates so determined would be less than 5%. If an adjustment to the prima facie premium rates is indicated, the Department will publish the new prima facie premium rates in the Pennsylvania Bulletin. If an adjustment to the loss ratio standards is indicated, the Department will propose appropriate amendments to § 73.123 (relating to loss ratio standards) to reflect the change.
(m) Review of nonclaim elements. By ____(Editor's Note: The blank refers to a date 9 years after the effective date of adoption of this proposal), and at least every 9 years thereafter, the Department will review the changes in the average term and amount of coverage, the changes in the fixed and variable expenses and the reasonable profit margin for insurance companies writing credit life insurance in this Commonwealth. If this review indicates that a change in the nonclaim elements of the premium rates is necessary, the Department will propose amendments to the loss ratio standards in § 73.123 and thereafter publish new prima facie premium rates in the Pennsylvania Bulletin.
§ 73.107. Accident and health insurance benefits.
(a) A and H benefit plans. The prima facie premium rate standards referenced in § 73.109 (relating to A and H insurance rate standards) apply to a plan of credit A and H insurance benefits, if the plan provides the features listed in paragraphs (1)--(7). This plan shall be described in a group policy and group certificate or in an individual policy.
(1) Single A and H coverage or joint A and H coverage for all eligible debtors.
(2) A monthly benefit payable upon the debtor's disability, subject to any maximum dollar amount of coverage specified in the group policy and group certificate or individual policy, equal to any of the following:
(i) The monthly installment payment required under the contract of indebtedness, for closed end loans.
(ii) The benefit amount provided in § 73.139(f) (relating to credit insurance on open end loans), for open end loans.
(iii) The benefit amount provided in § 73.140(d) (relating to credit insurance on closed end variable interest loans), for closed end variable interest loans.
(iv) The benefit amount as provided in § 73.141(f) (relating to credit insurance on lease transactions), for lease transactions.
(3) A coverage period equal to the lesser of the following:
(i) The term of the indebtedness remaining at the time coverage is elected.
(ii) The term of the indebtedness remaining at the time coverage is elected to the time the insured debtor attains an age at which the group policy and group certificate or individual policy provides for coverage to terminate.
(iii) The term of the indebtedness remaining at the time coverage is elected until truncated coverage terminates.
(4) An elimination period as provided by the policy or certificate of either 14 days or 30 days following the commencement of disability, with benefits becoming payable on either a retroactive or nonretroactive basis.
(5) A requirement for proof of disability in the form of one or both of the following:
(i) During the first 12 months of disability, proof that the insured debtor is unable to perform all of the important or significant occupational duties at the time the disability commences. After 12 months of disability, proof that the debtor is unable to perform the duties required of any gainful occupation for which the debtor is reasonably suited by education, training or experience.
(ii) A medical determination of the insured debtor's total disability.
(6) A preexisting condition exclusion for disability that commences within 6 months after the effective date of coverage and is the result of an illness, disease or physical condition for which the debtor received medical advice, consultation or treatment within 6 months prior to the effective date of coverage. The effective date of coverage for each portion of the insurance attributable to a different advance under an open end loan is the date on which the advance occurs, or the date on which coverage is elected, if later.
(7) The payment of an A and H benefit shall cease at the scheduled expiration date of the group certificate or individual policy, or when the indebtedness is prepaid.
(b) Alternate benefit plans. Insurers may offer credit A and H insurance benefit plans that differ from the plan described in subsection (a). An alternate plan shall be described in a group policy and group certificate, or in an individual policy, and shall conform to the standards of section 7(b) of the act (40 P. S. § 1007.7(b)) and the applicable standards of section 618 of The Insurance Company Law of 1929 (40 P. S. § 753). The premium rate standards of § 73.109 apply to alternate benefit plans.
§ 73.108. A and H insurance requirements.
A plan of credit A and H insurance and a group policy and group certificate or an individual policy describing the plan, shall comply with the following:
(1) Joint coverage basis. If joint A and H coverage is provided, it shall be provided either on the basis of each debtor being insured for 100% of the monthly disability payment, or on the basis of each debtor being insured for a specified portion of the amount of the monthly disability payment, with the total of these portions equal to 100% of the monthly disability payment.
(2) Joint contract.
(i) If joint A and H coverage is provided, a group certificate or individual policy providing joint A and H coverage shall be issued. Insurers may not issue two single A and H coverage group certificates or two single individual polices.
(ii) The benefit payable in the case of simultaneous disability of both insureds may not exceed the benefit that would be payable if coverage were provided on only one debtor.
(3) Continuation of coverage. If joint A and H coverage is provided, and coverage on one of the insured debtors is terminated or voided for any reason other than for termination of the indebtedness, any remaining eligible debtor's coverage shall continue and an equitable adjustment of premium shall be made. The remaining eligible debtor's coverage shall continue under a single A and H coverage group certificate or individual policy.
(4) Voiding coverage for ineligible employment. If a gainful employment requirement is applicable, and a debtor who is not gainfully employed correctly stated employment status information in an application signed by the debtor, and if a group certificate or individual policy is issued, the insurer has the right to void coverage on the debtor, but only within 60 days from the date of issue of the group certificate or individual policy. This action shall be without prejudice to any claim for a disability that commenced before the termination date.
(5) Voiding coverage for ineligible age. If a debtor exceeds the eligibility age for coverage and has correctly stated age information in an application signed by the debtor, and if a group certificate or individual policy is issued, the insurer has the right to void coverage on the debtor, but only within 60 days from the date of issue of the group certificate or individual policy. This action shall be without prejudice to any claim for a disability that commenced before the termination date.
(6) Terminating coverage for ineligible age. When premiums are payable monthly based on the actual monthly outstanding balance, if a debtor who exceeds the age at which coverage is to terminate under a group certificate or individual policy has correctly stated age information in an application signed by the debtor, and premiums continue to be erroneously charged to the debtor, the insurer has the right to terminate coverage as of the next billing date. This action shall be without prejudice to any claim for a disability that commenced before the termination date.
(7) Reducing excess coverage. If an identifiable charge is erroneously made to a debtor for an amount of coverage that exceeds the maximum dollar amount of coverage specified in the group policy and group certificate or individual policy, the insurer has the right to reduce the amount of coverage to the appropriate amount specified in the group policy and group certificate or individual policy, but only within 60 days from the date the identifiable charge is made to the debtor. If coverage is reduced, a refund shall be made of the difference between the actual amount charged and the appropriate amount that should have been charged.
(8) Contestability. A contestability provision may not be more restrictive than to provide that coverage on a debtor shall be incontestable after the group certificate or individual policy has been in force during the lifetime of the debtor for 2 years from the date of issue. Coverage shall be contested only based upon information contained in an insurance application signed by the debtor, a copy of which is furnished, not later than when coverage is contested, to the debtor, a secondary beneficiary, or other claimant.
(9) Equitable premium or benefit adjustment. A provision specifying an adjustment of premiums or of benefits, or of both, to be made if information relating to the age of a debtor has been fraudulently misstated shall be considered to be equitable if it places the debtor and the insurer in the position they would have been in had the age information been correctly stated. An adjustment may not be made unless the age information is contained in an application signed by the debtor, a copy of which is furnished, not later than the time the adjustment is made, to the debtor, a secondary beneficiary or other claimant.
(10) Renewal or refinancing. With respect to the renewal or refinancing of an existing insured indebtedness, the effective date of coverage on the renewed or refinanced indebtedness shall be the date on which the insurer originally insured the debtor with respect to the indebtedness that is renewed or refinanced.
(11) Truncated A and H coverage.
(i) Truncated credit A and H insurance may be provided only in connection with loans or credit transactions that are for a term greater than 60 months.
(ii) The truncated coverage period shall be at least 60 months.
(iii) If truncated coverage is elected by a debtor, at the time of the election of the insurance coverage the debtor shall be informed in writing of the term of the insurance coverage and that the coverage will terminate prior to the scheduled maturity date of the indebtedness.
(iv) A group certificate or individual policy providing truncated credit insurance coverage shall disclose both the term of the truncated insurance coverage and that the term of insurance coverage will terminate prior to the scheduled maturity date of the indebtedness. The termination disclosure shall appear in prominent type on the first page of the group certificate or individual policy.
(12) Preexisting exclusion disclosure. A group certificate or individual policy providing for a preexisting condition exclusion shall disclose the exclusion and its effects upon benefit payments. The preexisting condition exclusion disclosure shall appear in prominent type on the first page of the group certificate or individual policy.
§ 73.109. A and H insurance rate standards.
(a) Prima facie A and H rates. Premium rates for credit A and H insurance benefits, as described in § 73.107(a) (relating to A and H insurance benefits), may not exceed the prima facie premium rates referenced in this section and published in the Pennsylvania Bulletin, unless higher premium rates are approved under § 73.122 (relating to deviated rates). Premium rates for benefits that differ from those benefits described in § 73.107(a) may not exceed premium rates that are actuarially consistent with the prima facie premiums rates referenced in this section and published in the Pennsylvania Bulletin.
(b) Symbols. The symbols used in this section shall have the following meanings:
(1) n = coverage period in months.
(2) Opn = monthly outstanding balance prima facie premium rate per $1,000 of outstanding balance.
(3) SPn = single premium prima facie premium rate per $100 of initial insured gross indebtedness, as defined in § 73.103 (relating to definitions), repayable in n equal monthly installments.
(c) Debtor insurance charge. The amount charged a debtor by a creditor for credit A and H insurance may not exceed the premium amount charged by the insurer, as computed at the time the charge to the debtor is determined.
(d) Single premium rates for full benefit and full term periods. If premiums are payable on a single premium basis for insurance with a full benefit period and a full term coverage period, the single premium prima facie premium rates for credit A and H insurance on a single life shall be as published in the Pennsylvania Bulletin.
(e) Single premium rates for limited benefit and limited term periods. If premiums are payable on a single premium basis for insurance with a limited term coverage period and a benefit period equal to the limited term coverage period, the prima facie premium rates shall be as published in the Pennsylvania Bulletin, for an installment period equal to the number of monthly installment payments in the limited term coverage period. The premium shall be determined by multiplying the prima facie premium rate by the monthly installment payment, by the number of months in the limited term coverage period, divided by 100.
(f) Single premium rates for limited benefit and full or limited term periods. If premiums are payable on a single premium basis for insurance with a limited benefit period for a full term or limited term coverage period, the single premium rates for credit A and H insurance on a single life may not exceed premium rates that are actuarially consistent with the single premium prima facie premium rates published in the Pennsylvaia Bulletin.
(g) Monthly outstanding balance rates for full benefit and full term periods. If premiums are payable on a monthly outstanding balance basis for insurance with a full balance benefit period for a full term coverage period, the monthly prima facie premium rates for credit A and H insurance on a single life shall be as published in the Pennsylvania Bulletin. The monthly prima facie premium rates shall be calculated in accordance with the following formula:
(h) Monthly outstanding balance rates for limited benefit period and limited term periods. If premiums are payable on a monthly outstanding balance basis for insurance with a limited term coverage period and a benefit period equal to the limited term coverage period, the monthly prima facie premium rates shall be as published in the Pennsylvania Bulletin for an installment period equal to the number of monthly installment payments in the limited term coverage period. The monthly premium shall be determined by multiplying the prima facie premium rate by the monthly loan payment, by the remaining number of months in the limited term coverage period, divided by 1,000.
(i) Monthly outstanding balance rates for limited benefit and full or limited term periods. If premiums are payable on a monthly outstanding balance basis for insurance with a limited benefit period for a full term or limited term coverage period, the monthly premium rates for credit A and H insurance on a single life may not exceed premium rates that are actuarially consistent with the monthly prima facie premium rates published in the Pennsylvania Bulletin.
(j) Joint rates.
(1) When each debtor is insured for 100% of the monthly A and H payment, the prima facie premium rates for joint credit A and H insurance shall equal 180% of the prima facie premium rates for single A and H coverage.
(2) When each debtor is insured for a specific portion of the monthly disability payment, the prima facie premium rates for joint credit A and H insurance shall equal 100% of the prima facie premium rates for single A and H coverage.
(k) Actuarially consistent rates. For credit A and H insurance offered on any other basis, prima facie premium rates shall be actuarially consistent with the rate standards of subsections (d)--(i).
(l) Adjustment of prima facie rates and loss ratio standards. By ____(Editor's Note: The blank refers to a date 3 years after the effective date of adoption of this proposal.) and at least every 3 years thereafter, the Department will review the appropriateness of the prima facie premium rates referenced in this section based upon Commonwealth experience data for the preceding 3-calendar years. The nonclaim element of the prima facie premium rates may not be adjusted unless an adjustment is necessary under subsection (m). An adjustment to the prima facie premium rates will not be made if the change in prima facie premium rates so determined would be less than 5%. If an adjustment to the prima facie premium rates is indicated, the Department will publish the new prima facie premium rates in the Pennsylvania Bulletin. If an adjustment to the loss ratio standards is indicated, the Department will propose appropriate amendments to § 73.123 (relating to loss ratio standards) to reflect this change.
(m) Review of nonclaim elements. By ____(Editor's Note: The blank refers to a date 9 years after the effective date of adoption of this proposal), and at least every 9 years thereafter, the Department will review the changes in the average term and amount of coverage, the changes in fixed and variable expenses and the reasonable profit margin for insurance companies writing credit A and H insurance in this Commonwealth. If this review indicates that a change in the nonclaim elements of the premium rates is necessary, the Department will propose amendments to the loss ratio standards in § 73.123 and thereafter publish new prima facie premium rates in the Pennsylvania Bulletin.
§ 73.110. Involuntary unemployment insurance benefits.
(a) Involuntary unemployment benefits plans. The prima facie premium rate standards referenced in § 73.112 (relating to involuntary unemployment insurance rate standards) apply to a plan of credit involuntary unemployment insurance benefits, if the plan provides the features of paragraphs (1)--(6). This plan shall be described in a group policy and group certificate or in an individual policy.
(1) Single involuntary unemployment coverage or joint involuntary unemployment coverage for all eligible debtors.
(2) A monthly benefit payable upon involuntary unemployment, subject to any maximum dollar amount of coverage specified in the group policy and group certificate or individual policy, equal to any of the following:
(i) The monthly installment payments required under the contract of indebtedness, for closed end loans.
(ii) The benefit amount as provided in § 73.139(f) (relating to credit insurance on open end loans), for open end loans.
(iii) The benefit amount as provided in § 73.140(d) (relating to credit insurance on closed end variable interest loans), for closed end variable interest loans.
(iv) The benefit amount as provided in § 73.141(f) (relating to credit insurance on lease transactions), for lease transactions.
(3) A coverage period equal to the lesser of the following:
(i) The term of the indebtedness remaining at the time coverage is elected.
(ii) The term of the indebtedness remaining at the time coverage is elected to the time the insured debtor attains an age at which the group policy or group certificate or individual policy provides for coverage to terminate.
(iii) The term of the indebtedness remaining at the time coverage is elected until truncated coverage terminates.
(4) An elimination period as provided by the policy or certificate of 30 days following the commencement of involuntary unemployment, with benefits becoming payable on either a retroactive or nonretroactive basis.
(5) A definition of involuntary unemployment requiring that the debtor be unemployed as a result of nonvoluntary termination from a single job at which the debtor worked for a salary or wages for 30 or more hours a week for at least the 12 months prior to the effective date of insurance coverage. Unemployment due to a lockout as defined in § 73.103 (relating to definitions) will be considered to be involuntary unemployment.
(6) A requirement that the payment of an involuntary unemployment benefit shall cease at the scheduled expiration date of the group certificate or individual policy, or at such time as the indebtedness is prepaid.
(b) Alternate benefit plans. Insurers may offer credit involuntary unemployment insurance benefit plans that differ from the plan described in subsection (a). Any alternate plan shall be described in a group policy and group certificate, or in an individual policy, and shall conform to the standards of section 7(b) of the act (40 P. S. § 1007.7(b)). The premium rate standards of § 73.112 apply to alternate benefit plans.
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