North Carolina General Statutes 58-57-40. Credit life insurance rate standards
(a) The premium rate standards set forth below are applicable to plans of credit life insurance with or without requirements for evidence of insurability:
(1) Which contain no exclusions or no exclusions other than suicide; and
Terms Used In North Carolina General Statutes 58-57-40
- Credit life insurance: means insurance on the life of a debtor pursuant to or in connection with a specific loan or other credit transaction as defined in N. See North Carolina General Statutes 58-57-5
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- following: when used by way of reference to any section of a statute, shall be construed to mean the section next preceding or next following that in which such reference is made; unless when some other section is expressly designated in such reference. See North Carolina General Statutes 12-3
- Indebtedness: means the total amount payable for the term of the loan by debtor to creditor in connection with a loan or other credit transaction, including principal, interest, allowable charges, and any premiums authorized hereunder. See North Carolina General Statutes 58-57-5
- Joint life coverage: means credit life insurance covering two or more lives, the entire amount of insurance being payable upon the death of the first insured debtor to die. See North Carolina General Statutes 58-57-5
(2) Which contain no age restrictions, or only age restrictions not making ineligible for the coverage
a. Debtors under 65 at the time the indebtedness is incurred; or
b. Debtors who will not have attained age 66 on the maturity date of the indebtedness.
(b) Rates for use with forms which are more restrictive in any material respect shall reflect such variations in the form or lower rates to the extent that a significant difference in claim cost can reasonably be anticipated unless the insurer demonstrates that such lower rate is not appropriate.
(c) If premiums are payable in one sum in advance, for decreasing term life insurance on indebtedness repayable in substantially equal monthly installments, a premium rate not exceeding sixty-five cents (65¢) per one hundred dollars ($100.00) of initial insured indebtedness per year is authorized. Effective January 1, 1995, a premium rate not exceeding sixty cents (60¢) per one hundred dollars ($100.00) of indebtedness per year is authorized. Effective January 1, 1996, a premium rate not exceeding fifty-five cents (55¢) per one hundred dollars ($100.00) of indebtedness per year is authorized. Effective January 1, 1997, a premium rate not exceeding fifty cents (50¢) per one hundred dollars ($100.00) of indebtedness per year is authorized.
(d) The premium rate of joint life coverage shall not exceed one and two-thirds (1 2/3) the permitted single life rate.
(e) For level term life insurance, a premium rate of one dollar and twenty-five cents ($1.25) per one hundred dollars ($100.00) per year is authorized. Effective January 1, 1995, a premium rate of one dollar and twenty cents ($1.20) per one hundred dollars ($100.00) per year is authorized. Effective January 1, 1996, a premium rate of one dollar and fifteen cents ($1.15) per one hundred dollars ($100.00) per year is authorized. Effective January 1, 1997, a premium rate of one dollar and ten cents ($1.10) per one hundred dollars ($100.00) per year is authorized.
(f) For policies for which monthly premiums are charged on a basis of the then-outstanding balances, a monthly premium per one thousand dollars ($1,000) of outstanding balances is authorized, based on the following formula:
Opn = 20 SPn
n + 1
where SPn = Single premium rate per one hundred dollars ($100.00) of initial insured indebtedness repayable in n equal monthly installments.
Opn = Monthly outstanding balance premium rate per one thousand dollars ($1,000).
n = Original repayment period, in months.
(f1) Notwithstanding the premium rates otherwise set forth in this section for credit life insurance, the premium rates for such insurance written in connection with direct loans with contractual commitments of more than 10 years’ duration shall be filed with and approved by the Commissioner. Such premium rates shall exhibit a reasonable relationship to the benefits provided.
(g) For credit life insurance on a basis other than the foregoing, premiums charged shall be actuarially equivalent.
(h) In addition to the premium rate authorized, a charge may also be made for a nonrefundable origination fee per credit life insurance transaction as set forth below:
Insured Indebtedness Fee Permitted
less than $250.00 none
$250.00 or more but $1.00
less than $500.00
$500.00 or more $3.00
No third or subsequent origination fee may be charged in connection with a third or subsequent refinancing within any twelve-month period. (1975, c. 660, s. 1; 1987, c. 826, ss. 4, 5, 13; 1991, c. 720, s. 91; 1993, c. 226, s. 7.)