23 CAR pt. 83 | 23 CAR Part 83 — Credit Life and Credit Disability Insurance

Chapter I

Subchapter B

Subpart 1

23 CAR § 83-101 Scope {#sec-23-car-83-101 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-101}

23 CAR § 83-101. Scope.

All life insurance and all disability insurance sold in connection with loans or other credit transactions shall be subject to the provisions of this part, except such insurance sold in connection with a loan or credit transaction of more than ten (10) years' duration.

23 CAR § 83-102 Definitions {#sec-23-car-83-102 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-102}

23 CAR § 83-102. Definitions.

All terms used herein shall be as defined herein unless otherwise defined in the Model Act for the Regulation of Credit Life Insurance and Credit Disability Insurance, Arkansas Code § 23-87-101 et seq.

23 CAR § 83-103 Disclosure provisions {#sec-23-car-83-103 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-103}

23 CAR § 83-103. Disclosure provisions.

(a) All credit life insurance and credit disability insurance shall be evidenced by an individual policy, or in the case of group insurance by a certificate of insurance, which individual policy or group certificate of insurance shall be delivered to the debtor at the time the indebtedness is incurred, except as hereinafter provided.

(b) Each individual policy or group certificate of credit life insurance or credit disability insurance delivered or issued for delivery in this state shall, in addition to the other requirements of law, set forth:

(1) The name and home office address of the insurer and on group certificates, an identification of the master policy;

(2)(A) The identity by name or otherwise of the insured debtor.

(B) If age is a condition of eligibility or termination, this shall be shown in the certificate;

(3) The rate or amount of payment, if any, to the debtor, separately for credit life insurance and credit disability insurance;

(4) The amount and term of insurance coverage shall be set forth or described;

(5) A description of the coverage including any and all:

(A) Exceptions;

(B) Limitations; and

(6) A statement that:

(A) The benefits shall be paid to the creditor to reduce or extinguish the indebtedness; and

(B) Wherever the amount of insurance may exceed the unpaid indebtedness, that any such excess shall be payable to:

(i) A beneficiary, other than the creditor; or

(ii) In the absence of such designation, to surviving spouse or to his or her estate; and

(7)(A) A statement indicating that upon discharge of the indebtedness by a prepayment, renewal, refinancing, or otherwise, the insurance shall be terminated, and that in all cases of termination prior to scheduled maturity, a refund of any unearned amount paid by or charged to the debtor for insurance shall be made in accordance with the appropriate formula set forth in 23 CAR § 83- 110.

(B) No refund need be made if the amount thereof is two dollars ($2.00) or less.

(C) In the case of the termination of credit life insurance by death of the insured debtor, the life insurance premium paid or then due and payable to the insurer is deemed earned, and no refund thereof is required.

(c) If said individual policy or group certificate of insurance is not delivered to the debtor at the time the indebtedness is incurred, a copy of an application for such individual policy or a notice of such proposed group insurance coverage shall be delivered to the debtor at the time such indebtedness is incurred, and such application or notice of proposed insurance shall be signed by the debtor and shall set forth:

(1) The name and home office address of the insurer and on notices of proposed group insurance, an identification of the master policy;

(2)(A) The identity by name or otherwise of the insured debtor.

(B) If age is a condition of eligibility or termination, this shall be shown in the application or notice signed by the debtor;

(3) The rate or amount of payment, if any, to the debtor, separately for credit life and credit disability insurance;

(4) The amount of the insurance coverage shall be set forth or described; and

(5) A brief description of the coverage including any and all:

(A) Exceptions;

(B) Limitations; and

(d) The copy of such application or notice of proposed insurance shall refer exclusively to insurance coverage and shall be separate and apart from the loan, sale, or other credit statement of account, instrument, or agreement, unless the information above required appears in type of at least equal size and prominence as the other provisions of said:

(1) Statement of account;

(2) Instrument; or

(3) Agreement.

(e) The policy or certificate of insurance shall not contain provisions that would encourage misrepresentation or are:

(1) Unjust;

(2) Unfair;

(3) Inequitable;

(4) Misleading;

(5) Deceptive; or

(6) Contrary to law or to the public policy of this state.

(f) Within thirty (30) days after the insurance becomes effective as provided in Arkansas Code § 23-87-111(b), the insurer shall cause the individual policy or group certificate of insurance to be delivered to the debtor.

(g)(1) A group credit insurance policy that provides for payment of single premiums to the insurer shall provide that, in the event of termination of such policy by the insurer or creditor, insurance coverage with respect to any debtor insured under such policy shall be continued for the entire period for which a single premium has been paid by such debtor, subject to the debtor's right to cancel the insurance at any time by express action.

(2) A group credit insurance policy under which premiums are paid to the insurer monthly on outstanding balances shall contain a provision that, in the event of termination of such policy by the insurer or creditor, thirty-one (31) days’ notice of such termination shall be given to any debtor insured under the policy by the insurer where practicable, otherwise by the creditor unless there is immediate replacement of the coverage by the same or another insurer.

(3) With respect to debtors covered at the date of termination where notice is required, coverage shall continue as though the policy had not terminated until notice is given.

(h)(1) All applications for credit life and credit disability insurance and, where no application is used, all policies and certificates of credit life and credit disability insurance, shall be signed by the insured debtor.

(2) Nothing in this part shall be construed to conflict with this requirement.

23 CAR § 83-104 Filing and approval of forms and rates {#sec-23-car-83-104 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-104}

23 CAR § 83-104. Filing and approval of forms and rates.

(a)(1) Every insurance company, when submitting a policy form for approval by the Insurance Commissioner shall submit therewith the schedule of rates applicable to such policy form.

(2) The face page of each such form or schedule submitted shall have added to its identifying form, symbol, or figure (by printing, typewriter, or rubber stamp) the following identification:

(A) "Credit Life"; or

(B) "Credit Disability".

(3) Such additional identification may but need not appear on issued copies of such forms.

(b)(1) As the basic test of the reasonableness of the relation of benefits to the premium charged, as provided in Arkansas Code § 23-87-112(b), to be applied separately by policy form number, it is hereby declared that the benefits for credit life or credit disability insurance, individual or group, shall be considered to be reasonable in relation to the premium charged either if:

(A) The premium charged is the premium or premium rate authorized by 23 CAR § 83-105 or 23 CAR § 83-106; or

(B) A loss ratio of fifty percent (50%) will or can reasonably be expected to be developed.

(2) The reporting forms required to be filed annually under 23 CAR § 83-113(a) will be used to determine if the basic test is being met.

23 CAR § 83-105 Presumably acceptable relation to credit life insurance benefits to premium {#sec-23-car-83-105 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-105}

23 CAR § 83-105. Presumably acceptable relation to credit life insurance benefits to premium.

(a) The Insurance Commissioner may presume that the benefits of a credit life insurance form are reasonable in relation to the premium charged if the premium or premium rate schedule for death benefits as filed with the commissioner and charged for the coverage does not exceed an amount equal or actuarially equivalent to the following maximum rates:

(1) Coverage on a single life provided on the outstanding indebtedness basis, one dollar ($1.00) per month per one thousand dollars ($1,000) of outstanding balance of insured indebtedness;

(2) Coverage on a single life provided by an individual or group policy on other than an outstanding indebtedness basis:

(A) Sixty-five cents (65¢) per year of coverage per one hundred dollars ($100) of initial insured indebtedness for credit transactions when the insured indebtedness is repayable in substantially equal monthly installments during the term of coverage; and

(B) One dollar and twenty cents ($1.20) per year of coverage per one hundred dollars ($100) of level term life insurance where the amount of insured indebtedness remains level during the term of coverage and is repayable in a single sum at the end of the term;

(3) Coverage on joint lives provided on the outstanding indebtedness basis, one dollar and seventy cents ($1.70) per month per one thousand dollars ($1,000) of outstanding balance of insured indebtedness;

(4) Coverage on joint lives provided by an individual or group policy on other than an outstanding indebtedness basis:

(A) One dollar and ten cents ($1.10) per year of coverage per one hundred dollars ($100) of initial insured indebtedness is repayable in substantially equal monthly installments during the term of coverage; and

(B) Two dollars and four cents ($2.04) per year of coverage per one hundred dollars ($100) of level term insurance where the amount of insured indebtedness remains level during the term of coverage and is repayable in a single sum at the end of the term; and

(5) No certificate fee, policy issue charge, or any charge other than the premium herein provided shall be made.

(b) The foregoing rate test in 23 CAR § 83-104 for the presumed reasonableness of benefits in relation to premiums is based upon the following requirements:

(1) That the credit life insurance contract:

(A) May require:

(i) Submission of evidence of insurability;

(ii) That the debtor be in gainful employment at the time the insurance becomes effective; or

(iii) Both; and

(B) Contains no:

(i) Conditions of coverage more restrictive than absence of

misrepresentation if a health statement or evidence of insurability is required; and

(ii) Exclusions other than for suicide (incontestable after two (2) years) and flight in nonscheduled aircraft; and

(2) That coverage is provided or offered to all debtors:

(A) Regardless of age; or

(B) Not older than the applicable limit, which shall not be less than the attained age of:

(i) Sixty-five (65) years if such limit applies to the age when the insurance attached; or

(ii) Sixty-six (66) years if such limit applies to the age on the scheduled maturity date of the debt.

(c) If the premiums are determined according to age of the insured debtor or by age brackets, appropriate adjustments in the rate and premium may be made according to age, provided such adjustment is on a basis actuarially consistent with the foregoing rates when applied regardless of actual age at issue.

(d)(1)(A) The phrase "joint lives" means only spouses, business partners, comakers, guarantors, and endorsers, and such persons must be:

(i) Jointly and severally liable for repayment of a single indebtedness; and

(ii) Joint signers of the instrument of indebtedness.

(B) Joint life coverage shall not be written covering more than two (2) lives.

(2) Joint life rates may not be charged for single life coverage.

(e) If a form of contract of insurance includes other lawful benefit or benefits for which standards of reasonableness of benefits in relation to premium are not elsewhere in this part determined or described, any premium charged therefore in excess of the foregoing rates shall be shown to the satisfaction of the commissioner to be based upon credible statistics and reasonable in relation to the additional benefit provided, such showing to be in accordance with the basic loss ratio in 23 CAR § 83-104(b).

23 CAR § 83-106 Presumably acceptable relation of credit disability insurance benefits to premiums {#sec-23-car-83-106 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-106}

23 CAR § 83-106. Presumably acceptable relation of credit disability insurance benefits to premiums.

A credit disability benefit, whether provided by a separate disability policy or as a disability benefit in combination with a group or individual credit life policy, is presumed to be reasonable in relation to the premium charged if the premium or premium rate schedule for the benefit as filed with the Insurance Commissioner and charged or to be charged for the coverage does not exceed an amount equal or actuarially equivalent to the maximum rates for the amount and lengths of time of coverage indicated in Exhibit A attached hereto.

23 CAR § 83-107 Standards and principles for application of the credit disability rates {#sec-23-car-83-107 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-107}

23 CAR § 83-107. Standards and principles for application of the credit disability rates.

(a) The standards and principles for the application of the rates set forth in 23 CAR § 83-106 are as follows:

(1) The initial amount of insured indebtedness to which the rate is applied shall not exceed the aggregate of the periodic scheduled unpaid installments of the indebtedness;

(2) The indebtedness is repayable in substantially equal monthly installments during the period of coverage;

(3)(A) The rates for premiums payable on other than a single premium basis shall be the actuarial equivalent of the rates set forth in 23 CAR § 83-106.

(B) Such premium rates will be deemed the actuarial equivalent of the foregoing single premium rates if such rates produce a total premium for any duration and amount of insurance equal to the corresponding single premium for the same duration and amount of insurance; and

(4) The credit disability insurance contract:

(A) Does not cover disabilities resulting from preexisting:

(i) Illness;

(ii) Disease; or

(iii) Physical condition;

(B) May require:

(i) Submission of evidence of insurability; and

(ii) That the debtor be in gainful employment at the time the insurance becomes effective; and

(i) Disability resulting from normal pregnancy;

(ii) Intentionally self-inflicted injuries;

(iii) Foreign travel or residence;

(iv) Flight in nonscheduled aircraft;

(v) War; or

(vi) Military service.

(b) The eligibility for disability coverage may be restricted on account of age in the same manner as permitted for credit life insurance in 23 CAR § 83-105(b)(2).

23 CAR § 83-108 Credit life and credit disability forms at higher rates or lower rates {#sec-23-car-83-108 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-108}

23 CAR § 83-108. Credit life and credit disability forms at higher rates or lower rates.

(a) Notwithstanding the determination by the Insurance Commissioner that the rates specified in 23 CAR §§ 83-105 and 83-106 are the presumably acceptable maximum rates that are reasonable in relation to the benefits of a policy providing the coverage to which the rates are applicable, an insurer may receive approval of a higher premium rate or schedule of rates to be used in connection with a creditor or class of creditors if said insurer demonstrates to the satisfaction of the commissioner that the:

(1) Mortality or morbidity experience which may reasonably be anticipated will be significantly higher than the average anticipated experience on the basis of which the applicable rate standards specified in 23 CAR §§ 83-105 and 83-106 were based; and

(2) Proposed rate can reasonably be anticipated to produce a loss ratio not less than that set out in 23 CAR § 83-104(b).

(b)(1) Insurers may file rates lower than those specified in 23 CAR §§ 83-105 and 83-106 and, having filed acceptable rates under this part, may thereafter charge lesser rates without refiling.

(2) Provided, however, that other laws and this part are complied with.

23 CAR § 83-109 Additional coverages {#sec-23-car-83-109 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-109}

23 CAR § 83-109. Additional coverages.

If a company proposes to write any type of coverage with rates other than those set forth in 23 CAR §§ 83-104 – 83-107, it may request the Insurance Commissioner to set a hearing to determine:

(1) If a public need exists for such coverage; and

(2) Through credible statistics, whether the proposed rate may be presumed to be reasonable for such coverage in relation to the benefits offered until the time that experience in accordance with 23 CAR § 83-104 indicates a different rate.

23 CAR § 83-110 Refund formula {#sec-23-car-83-110 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-110}

23 CAR § 83-110. Refund formula.

(a) With respect to policies issued and certificates delivered after the effective operative date of this part:

(1) The refund of an unearned amount paid by or charged to the debtor for insurance in the case of reducing term credit life insurance or credit disability insurance on which such charges to the debtor are payable by other than a single sum and of level term credit life insurance shall be not less than the pro rata gross unearned amount charged; and

(2) The refund of an unearned amount paid by or charged to the debtor for insurance in the case of reducing term credit life insurance or of reducing credit disability insurance on which the insurance charges to the debtor are paid in a single sum shall be not less than the amount computed by the sum of the digits formula, commonly known as the "Rule of 78".

(b)(1) Each debtor is entitled to receive from the person or persons legally responsible for paying it a refund of unearned identifiable insurance charges on termination of insurance in cash or by credit against the next installment on his or her account in accordance with the insurer's approved refund formula.

(2)(A) Insurers shall be responsible for the establishment of procedures by which refunds or credits are to be made and shall furnish to the creditors schedules of refunds or credits, conforming with the requirement hereof, to be made in the event of termination of insurance.

(B) Insurers shall also furnish instructions to creditors with respect to their duties and functions in the making of such refunds or credits.

(c)(1) The requirement for filing refund formulas will be considered met if they are set forth in the individual policy or group policy filed with the Insurance Commissioner and not disapproved.

(2) If the appropriate refund formula is the sum of the digits formula, commonly known as the "Rule of 78”, it shall be sufficient to so refer to it.

(d) A premium refund or credit need not be made if the amount thereof is two dollars ($2.00) or less.

23 CAR § 83-111 Claims and review procedure {#sec-23-car-83-111 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-111}

23 CAR § 83-111. Claims and review procedure.

(a)(1) The insurance company shall:

(A) Be responsible for the settlement, adjustment, and payment of all claims; and

(B) Establish and maintain adequate claim files, which may be reviewed and examined by the Insurance Commissioner.

(2) All claims shall be:

(A) Promptly reported to the insurance company or its designated claim representative; and

(B) Settled as soon as possible and in accordance with the terms of the insurance contract.

(b) All claims shall be paid either by draft drawn upon the insurance company or by check of the insurance company to the order of the claimant to whom payment of the claim is due pursuant to the policy provisions or upon direction of such claimant to the one specified.

(c)(1) No plan or arrangement shall be used whereby any person, firm, or corporation other than the insurer or its designated claim representative shall be authorized to settle or adjust claims.

(2) The creditor shall not be designated as claim representative for the insurer in settling or adjusting claims provided that a group policyholder may, by arrangement with the group insurer, draw drafts or checks in payment of claims due to the group policyholder subject to audit and review by the insurer.

(3) However, nothing herein shall be construed to relieve the insurance company from the responsibility for the proper settlement, adjustment, and payment of all claims in accordance with the terms of the insurance contract.

(d) It shall be the responsibility of the insurer to:

(1) Review each lender's account at least annually verifying the accuracy of premium payments or other identifiable insurance charges, premium refunds, and claims incurred; and

(2) Be prepared to exhibit the results of such review upon request of the commissioner.

23 CAR § 83-112 Financial statement reserves {#sec-23-car-83-112 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-112}

23 CAR § 83-112. Financial statement reserves.

In order to ensure that sufficient funds will be available to make the refunds required by the policy and this part and to guarantee promised benefits to policyholders:

(1) The aggregate reserves for each credit life insurance policy shall not be less than one hundred thirty percent (130%) of reserves as computed in an appropriate mortality table in a manner determined in accordance with the Arkansas Insurance Code; and

(2) The reserve for each credit disability insurance policy shall not be less than the amount of unearned premium calculated from gross premiums in force upon either a pro rata or sum of the digits basis, as applicable.

23 CAR § 83-113 Statistical requirements and reporting {#sec-23-car-83-113 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-113}

23 CAR § 83-113. Statistical requirements and reporting.

(a) Carriers writing credit life insurance and credit disability insurance in Arkansas shall be required to keep statistical data subject to call in such form and manner as to enable the Insurance Commissioner to determine if rates are reasonable in relation to the benefits afforded by the various policy contracts together with appropriate expenses.

(b) The reporting forms adopted by the National Association of Insurance Commissioners, which are hereby incorporated herein by reference, shall be:

(1) Used to report such data; and

(2) Annually filed with the State Insurance Department.

23 CAR § 83-114 Agent compensation {#sec-23-car-83-114 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-114}

23 CAR § 83-114. Agent compensation.

(a) As to credit life or credit disability insurance written by or through a creditor, any affiliate, associate, subsidiary, director, officer, employee, or other representative of or for such creditor, or by or through any agent or broker, all compensation for writing or handling such insurance shall not exceed forty percent (40%) of the maximum premiums permitted herein.

(b) Compensation shall include, but shall not be limited to, the receipt directly, indirectly, or reciprocally of:

(1) Commissions, contingent commissions, service fees, policy fees, expense allowances or reimbursements, dividends, or other distribution of earnings based solely upon the profits derived from issuing or reinsuring any policy of credit life or credit disability insurance;

(2) Gifts, all benefits such as items of merchandise, equipment, travel, conventions, vacations, rewards, bonuses, trading stamps, scripts, or any other form of remuneration resulting directly or indirectly from the sale of credit insurance or as an inducement to or payment for sales made or volumes of sales obtained;

(3) Experience refunds, retrospective rate credits, and dividends, for the sole purpose of determining presumptively reasonable compensation allowances under this section; and

(4) Any amounts or things of value received from or paid by any person other than an insurer in consideration of the sale or retention of credit insurance.

(1) Reinsurance premiums paid to or underwriting profits generated by an insurer or reinsurer not owned by, controlled by, or under common control with:

(A) A credit insurer;

(B) An agent;

(D) A creditor;

(E) A group of creditors; or

(F) Any affiliate, associate, subsidiary, director, officer, employee, or other representative of or for such:

(i) Credit insurer;

(ii) Creditor; or

(iii) Group of creditors;

(2) Reinsurance premiums paid to or underwriting profits generated by an insurer or reinsurer owned by, controlled by, or under common control with a credit insurer, an agent, a broker, a creditor, a group of creditors, or any affiliate, associate, subsidiary, director, officer, employee, or other representative of or for such credit insurer, creditor, or group of creditors, on accounts in existence with such insurer or reinsurer on January 27, 1986, which have been registered with the Insurance Commissioner in accordance with subsection (d) of this section; and

(3) Payments made to successors in interest of the accounts described in subdivision (c)(2) of this section.

(d) Any insurer intending to utilize subdivision (c)(2) of this section must register with the commissioner within thirty (30) days after the effective date of this part the:

(1) Identity of the account or accounts involved;

(2) Name of the insurer or reinsurer;

(3) Name and address of the:

(A) Agent;

(B) Broker; or

(4) Name and address of the agent, broker, creditor, or group of creditors through which the account is written.

(e) Any insurer that, for credit insurance written in any of its credit insurance accounts in this state, charges or proposes to charge the presumptive rates of premium set forth in 23 CAR §§ 83-105 and 83-106 and that, for production of such insurance, pays or proposes to pay, directly or indirectly, compensation in excess of the presumptive allowance set out in subsection (a) of this section shall:

(1)(A) Reduce the premium rates charged in any such account by four percent (4%) or fraction thereof of the applicable presumptive premium rate set out in 23 CAR §§ 83-105 and 83-106 for each one percent (1%) or fraction thereof by which it pays or proposes to pay compensation in excess of the presumptive allowance set forth in subsection (a) of this section.

(B) Such compensation in excess of the presumptive compensation rate shall be applied thereafter to all subsequently written net premiums calculated upon the basis of the reduced rates of premium as specified above; and

(2) File with the commissioner a transcribed copy of any agreement, whether written or oral, direct, indirect, or reciprocal, by which for the sale of credit insurance in this state it pays, proposes to pay, or contingently may pay compensation in excess of the allowable presumptive compensation set out in subsection (a) of this section.

(f)(1) In the event that premium rates for any account of credit insurance are required to be reduced in accordance with subsection (e) of this section by reason of base or front-end compensation in excess of the presumptive compensation allowance, the effective date of such reduction shall be the same as the effective date of the agreement providing for such payment.

(2) For any reduction of premium rates required by subsection (e) of this section by reason of contingent compensations based upon favorable experience which, alone or together with base or front-end compensations, exceed the presumptive compensation allowance set out in subsection (a) of this section:

(A) The effective date of such reduction of premium rates shall be the termination date of the period for which such contingent compensations are paid; and

(B) Such rate reduction shall remain in effect in the account for a period of twelve (12) months thereafter, regardless of any change or replacement of the insurer during such twelve-month period.

(g) In the event that premiums are paid and charged debtors at rates in excess of the reduced rates required by subsection (e) of this section, whether by inadvertence or otherwise, the insurer shall be responsible for the refund of such overpayment to the person or persons who paid such premium in addition to any other remedies provided by law.

23 CAR § 83-115 Level term coverage {#sec-23-car-83-115 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-115}

23 CAR § 83-115. Level term coverage.

(a) All applications and, where no application is used, all policies or certificates of insurance, written on the level term coverage shall contain a separate statement acknowledging the fact that the coverage is on the level term coverage.

(b) The statement referred to in subsection (a) of this section shall provide for a separate signature by the insured other than the signature required in 23 CAR § 83-103(h).

23 CAR § 83-116 Compensating balances or special deposits {#sec-23-car-83-116 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-116}

23 CAR § 83-116. Compensating balances or special deposits.

(a) On or after adoption of this part the use of compensating balances or special deposit accounts in connection either directly or indirectly with a credit life insurance program and/or a credit disability insurance program is prohibited as being an illegal inducement in violation of Arkansas Code § 23-66-308.

(b)(1) This prohibition applies regardless of whether premiums are due the insurer on the single premium basis or on the monthly premium outstanding balance basis.

(2) Nothing herein shall prevent the insurer from making deposits in a financial institution which are not related to a credit insurance program.

(c) Compensating balances and/or special deposit accounts include the following, but are not limited to the exclusion of other types of balances and accounts:

(1) The deposit of premiums or money to the account of the insurer with a creditor for which the insurer provides the credit insurance program, when such account is either non-interest bearing or at a rate of interest less than usual or is controlled by the creditor;

(2) Remitting premiums to the insurer after the expiration of the grace period on a regular basis so that the arrearage period is constant;

(3) The retention of premiums by an agent to whom the creditor remits premiums for a period of time normally expected to be needed for the agent or broker to remit the premium to the insurer, if such delay is a continuing feature of the premium paying process; and

(4) Any other practice which unduly delays receipt of premiums by the insurer on a regular basis or which is followed by an insurer when such practice involves use of the financial resources of the insurer for the benefit of the creditor.

23 CAR § 83-117 Issuance of policies {#sec-23-car-83-117 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-117}

23 CAR § 83-117. Issuance of policies.

(a) All policies of credit life insurance and credit disability insurance shall be:

(1) Delivered or issued for delivery in this state only by an insurer authorized to transact insurance business therein; and

(2) Issued only through holders of licenses issued by the Insurance Commissioner.

(b) At least one (1) person so licensed shall be available in each location where credit insurance is offered, whether such insurance is offered on an individual or group basis.

(c) Attention is called to Arkansas Code 23-64-202(c)(6), which exempts applicants for licenses to sell credit insurance from the examination requirements of Arkansas Code § 23-64-202(b).

23 CAR § 83-118 Penalties {#sec-23-car-83-118 omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR § 83-118}

23 CAR § 83-118. Penalties.

In addition to any penalty provided by law, the Insurance Commissioner, in his or her discretion, may also revoke or suspend the license or Certificate of Authority of any person guilty of any violation of this part in accordance with Arkansas Code § 23-87-106.

23 CAR pt. 83, Appendix A Disability Rates {#sec-23-car-pt.-83-appendix-a omnilex-key=us-ar-regs-official--title-23-part-83--23 CAR pt. 83, Appendix A}

EXHIBIT A DISABILITY PER $100 INITIAL COVERAGE No. of Months Nonretroactive Benefits Retroactive Benefits in which Indebtedness 14 Day 30 Day 7 Day 14 Day 30 Day is pa;yable Nonretroactive Retroactive Retroactive Retroactive Retroactive 1 $.13 $ .58 $.40 $ 2 .42 .13 1.01 .81 -.56 3 .68 .35 1.34 1.12 .91 4 .go .53 1.60 1.36 1.17 5 1.08 .70 1.82 1.55 1.38 6 1.24 .85 2.01 1.71 1.54 7 1.37 .gs 2.18 1.86 1.69 8 1.50 1.09 2.32 1.98 1.82 9 1.61 1.20 2.46 2.10 1.94 10 1.71 1.30 2.58 2.20 2.04 11 1.81 1.39 2.6 9 2.30 2.14 12 1.89 1.48 2.79 2.39 2.23 13 1.97 1.56 2.89 2.47 2.32 14 2.05 1.63 2.98 2.55 2.40 15 2.12 1.70 3.06 2.62 2.47 16 2.19 1.77 3.14 2.69 2.55 17 2.26 1.83 3.22 2.76 2.61 18 2.32 1.89 3.29 2.82 2.68 19 2.38 1.95 3.36 2.88 2.74 20 2.44 2.01 3.43 2.94 2.80 21 2.49 2.07 3.50 3.00 2.8 5 22 2.55 2.12 3.56 3.05 2.91 23 2.60 2.17 3.62 3. 112.96 24 2.65 2.22 3.68 3.16 3.02 25 2.70 2.27 3.74 3.21 3.06 26 2.75 2.32 3.7 9 3.26 3.12 27 2.80 2.37 3.85 3.31 3.16 28 2.84 2.41 3.90 3.35 3.21 2 9 2.89 2.46 3.95 3.40 3.26 30 2.93 2.50 4.01 3.44 3.30 31 2.97 2.54 4.06 3.49 3.35 32 3.02 2.59 4. 11 3.53 3.39 33 3.06 2.63 4.16 3.573.43 34 3.10 2.67 4.21 3.61 3.47 35 3.14 2.71 4.2 5 3.6 5 3.51 36 3.18 2.75 4.30 3.69 3.55 37 3.22 2.79 4.35 3.73 3.59 38 3.26 2.83 4.39 3.77 3.63 39 3.30 2.86 4.44 3.81 3.67 40 3.34 2.90 4.48 3.8 5 3.71 41 3.37 2.94 4.52 3.89 3.7 5 42 3.41 2.98 4.57 3.92 3-78 43 3.45 3.01 4.61 3.96 3.82 44 3.48 3.05 4.65 3.99 3.8 5 45 3.52 3.08 4.69 4.03 3.89 46 3.55 3.12 4.73 4.06 3.93 47 3.59 3.15 4.77 4.10 3.96 48 3.62 3.18 4.81 4.13 4.00 49 3.65 3.22 4.85 4.17 4.03 50 3.69 3.25 4-89 4.204.06 51 3.72 3.28 4.93 4.23 4.10 5 2 3.75 3.32 4.97 4.27 4.1 3

No. of Months in which EXHIBIT A (Continued) ARKANSAS INSURANCE DEPARTMENT Nonretroactive Benefits Retroactive Benefits Indebtedness 14 Day 30 Day 7 Day 14 Day 3 0 Day payable Nonretroactive Nonretroactive Retroactive Retroactive Retroactive 5 3 3.79 3.35 5.00 4.30 4.16 54 3. 82 3.38 5.04 4.33 4.19 55 3.85 3.42 5.08 4. 36 4.22 56 3. 88 3.44 5. 11 4.39 4.25 5 7 3.91 3.47 5.15 4.42 4. 2 9 58 3.94 3.50 5.18 4.45 4.32 5 9 3.97 3.5 4 5.22 4.49 4.35 60 4.00 3.5 7 5. 26

RULE AND RffiUIATI0N 12 EXHIBIT A (Continued) Disability Rates Per $100 Initial Coverage No. of Months in which 60 Day 60 Indebtedness Nonretroactive Retroactive is payable 1 $ $ 2 3 -:T5 � 4 4 .24 .73 5 .3 2 .92 6 .39 1.04 7 .46 1.15 8 .54 1.26 9 .62 1.37 10 .70 1.48 11 .78 1.58 12 .86 1.68 13 .92 1.76 14 .gs 1.83 15 1.04 1.89 16 1.09 1.95 17 1.14 2.01 18 1.19 2.07 19 1.24 2.12 20 1.29 2.17 21 1.33 2.22 22 1.37 2.2 7 25 1.41 2.31 24 1.45 2.35 25 1.49 2.39 26 1.5 3 2.43 27 1.57 2.47 28 1.60 2.51 29 1.63 2.55 30 1.66 2.58 31 1.70 2.62 32 1.73 2.66 33 1.76 2.10 34 1.79 2. 73 35 1.82 2.76 36 1.85 2.79 37 1.88 2.82 38 1.91 2.85 39 1.9 4 2.88 40 1.97 2.91 41 2.00 2.94 42 2.0 3 2.97 4 3 2.06 3.00 44 2.09 3.03 45 2.12 3.06 46 2.15 3.09 47 2.17 3 .12 48 2.19 3.14

No. of Months in which Indebtedness is payable 4 9 50 51 52 53 5 4 55 56 5 7 58 5 9 60 EXHIBI'r A ( Continued) ARKANSAS INSURANCE DEPARTMENT 60 Day Nonretroactive 2.21 2 . 2 3 2.25 2.28 2.31 2.34 2.37 2. 4 0 2 .43 2.4 5 2.4 7 2.4 9 60 Day Retroactive 3.17 3. 20 3. 2 3 3. 25 3. 2 7 3.2 9 3.31 3.33 3.35 3.38 3.41 3.44

23 CAR Part 83 — Credit Life and Credit Disability Insurance