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No insurer shall issue any policy of group credit insurance covering debtors in this state, unless the rates are reasonable in relation to the benefits provided. The rates established prior to July 1, 1987, shall not be changed or adjusted until there has been an experience factor of four (4) years under the rates.
The rate levels are reasonable for policies that:
Condition coverage on the debtor's active employment at the time the indebtedness is incurred;
Extend coverage to all debtors regardless of age or to all debtors not older than a specified limit, which shall be not less than sixty-five (65) years of age at the time the insurance becomes effective; and
Exempt from coverage suicides committed, while sane or insane, within two (2) years from the most recent date of issue of the policy or certificate.
The applicability of the rate levels shall not be affected by the fact that the insurer requires the debtor to answer questions regarding health:
If the debtor applies for coverage more than thirty (30) days after the extension of credit for which coverage is sought; or
If the amount of credit life insurance applied for is twenty-five thousand dollars ($25,000) or more.
A creditor may remit and an insurer may collect premiums on either a single premium basis or on a monthly outstanding balance basis. If the creditor adds identifiable insurance charges or premiums for credit life insurance to the total amount of indebtedness, the creditor has loaned the premium or insurance charge to the debtor and the premium on the insurance charge is deemed collected for the insurer as soon as it is added to the indebtedness. In that event the creditor must remit and the insurer must collect on a single premium basis only. A creditor may remit and an insurer may collect on the monthly basis if the insurance charge or premium is not added to the amount of the loan and does not constitute part of the outstanding indebtedness, or if no direct or indirect finance, carrying, credit or service charge is made to the debtor in connection with the insurance charge or premium.
Nothing in this subsection (b) is intended to prohibit the premium or identifiable charge for decreasing, also known as reducing, term credit life insurance from being calculated prior to the commencement of the term of the insurance:
On that amount of insurance equal to each contractual monthly or other periodic outstanding principal balance of the specific loan or other credit transaction in connection with which the insurance is issued; and
At the rate that is the actuarial equivalent of the dollar and cent approved per annum rate for equal decreasing term credit life insurance;
The premium or other identifiable charge so determined may be collected as a single premium at the commencement of the term of the insurance.
“Single premium,” as used in this subsection (b), means and includes that premium that is paid in a single payment, with the commencement of the term notwithstanding the method of calculation or determination.
A minimum premium of fifty cents (50¢) shall be considered reasonable on any policy of credit life insurance. In the event any premium is unearned and to be returned to the insured, no returned premium calculated at less than one dollar ($1.00) need be refunded.
An insurer may receive approval of a different premium rate or schedule of premium rates to be used in connection with a particular policy form, or a class or classes of debtors of a creditor, the class or classes of debtors including, but not being limited to, debtors whose repayment schedules provide for less rapid repayment of principal than is assumed in calculating rates for decreasing term credit insurance, that demonstrates to the satisfaction of the commissioner that the mortality or morbidity experience that may reasonably be anticipated to result in a premium that is reasonable in relation to the benefits provided.
If an insurer proposes to write any type of life coverage in connection with loans or credit transactions other than those described in this section, it may request a public hearing to determine if a public need exists for the coverage, and to determine, through credible statistics, the initial rate to be employed.
Where an identifiable charge for group credit life insurance is made to insured borrowers or purchasers, the charge shall not exceed the premium provided for in the group policy issued to the creditor at the date of issue of the certificate.