Date:September 26, 2005
To:All Insurers Authorized to Write Credit Life and/or Credit Accident and Sickness Insurance
From:Jorge Gomez, Commissioner of Insurance
Subject:Revised Prima Facie Credit Life and Credit Accident and Sickness Insurance Rates

Section Ins 3.25 (13) (c), Wis. Adm. Code, provides on or before October 1, 1990, and each three years after that, the Commissioner shall give written notice to all authorized insurers specifying the prima facie rates to be effective for the three-year period beginning on the next January 1.

The periodic adjustments of the credit life rates are only based on differences in claim costs. The result is a new basic loss ratio that fulfills the presumption that benefits are reasonable to the premiums charged, as required by s. 424.209 (1), Wis. Stat. Therefore, please consider this bulletin as written notice of the new basic loss ratio of 42% for credit life insurance and the new prima facie rates for credit life and credit accident and sickness insurance to become effective for the three-year period beginning on January 1, 2006.

Prima Facie Credit Life Insurance Premium Rates:

Single premium straight-line decreasing single life insurance—$0.38 per annum per $100 of initial insured indebtedness

Single premium level life insurance on a single life—$0.70 per annum per $100 of initial insured indebtedness

Monthly premium rate on the outstanding insured balance basis for term insurance on a single life—$0.585 per month per $1,000 of outstanding insured indebtedness

Joint life insurance—167% of the corresponding single life premium rate, which develops corresponding joint life rates of:

Joint uniformly decreasing term—$0.63 per annum per $100 of initial insured indebtedness

Joint level life—$1.17 per annum per $100 of initial insured indebtedness

Joint monthly outstanding balance—$0.977 per month per $1,000 of outstanding insured indebtedness

Prima Facie Credit Accident and Sickness Premium Rates:

For the three-year period ending December 31, 2004, the credit accident and sickness loss ratio at prima facie rates divided by the composite credit accident and sickness basic loss ratio was 1.01. Therefore, pursuant to s. Ins 3.25 (13) (c) 5. c., Wis. Adm. Code, the adjustment factor shall be 1.00.

14-Day Retroactive Coverage—Multiply the existing prima facie rates by an adjustment factor of 1.00, rounded to the nearest cent

14-Day Nonretroactive Coverage—Multiply the existing prima facie rates by an adjustment factor of 1.00, rounded to the nearest cent

30-Day Retroactive Coverage—Multiply the existing prima facie rates by an adjustment factor of 1.00 rounded to the nearest cent

30-Day Nonretroactive Coverage—Multiply the existing prima facie rates by an adjustment factor of 1.00, rounded to the nearest cent

A table of credit accident and sickness rates is attached for your convenience.

Before January 1 of the year the new rates become effective, insurers who use these rates are required to make a rate filing adopting these rates. No documentation is required. Use the rate transmittal form, OCI 26-081, to submit both initial rate filings and subsequent rate change filings. It is recommended that rate filings for credit life and disability be submitted at least 60 days before the requested effective date.

Any questions regarding this bulletin should be directed to Jamie Key at (608) 267-1234 or Jamie.Key@oci.state.wi.us. Thank you for your cooperation.