No. 32908 (Amendment): Rule R590-228. Submission of Credit Life and Credit Accident and Health Insurance Form and Rate Filings

(Amendment)

DAR File No.: 32908
Filed: 08/27/2009 03:12:39 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of these changes is to update the rule to comply with rate and form filing procedures and to clarify language.

Summary of the rule or change:

The changes update the rule to comply with rate and form filing procedures; update incorporated documents; eliminate the reference to Sircon; change the time required to make filing corrections from 30 to 15 days; and require that the intent of the filing and purpose of each document be included with each filing.

State statutory or constitutional authorization for this rule:

• Section 31A-2-201
• Section 31A-2-202
• Section 31A-2-201.1

This rule or change incorporates by reference the following material:

• Updates: NAIC Uniform Life, Accident and Health, Annuity and Credit Coding Matrix, January 1, 2009, 08/27/2009 01/01/2009

Anticipated cost or savings to:

the state budget:

These changes will have no fiscal impact on the department. The changes will not increase the work load and no additional filings or fees will be required.

local governments:

The changes to this rule will have no impact on local governments since the rule deals with the relationship between the department and its licensees, in this case around 550 life and health insurance companies.

small businesses:

This rule affects life insurance companies; few, if any, would be considered small businesses. The changes to this rule update the procedures of the department to comply with national standards being used by most states. The only fiscal impact may be the reduction in rejected filings, as a result of language clarifications, which would result in reduced filing fees paid by insurers to the contracted organization processing these filings.

persons other than small businesses, businesses, or local governmental entities:

This rule affects life insurance companies; most are large businesses. The changes to this rule update the procedures of the department to comply with national standards being used by most states. The only fiscal impact may be the reduction in rejected filings, as a result of language clarifications, which would result in reduced filing fees paid by insurers to the contracted organization processing these filings. The changes to this rule will probably have no fiscal impact on consumers since it will have little if any impact on the insurer and deals solely with the procedures used to file insurance forms with the department.

Compliance costs for affected persons:

This rule affects life insurance companies; most are large businesses. The changes to this rule update the procedures of the department to comply with national standards being used by most states. The only fiscal impact may be the reduction in rejected filings, as a result of language clarifications, which would result in reduced filing fees paid by insurers to the contracted organization processing these filings.

Comments by the department head on the fiscal impact the rule may have on businesses:

The changes to this rule will have little, if any, fiscal impact on businesses in Utah.

D. Kent Michie, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Administration
450 N MAIN ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

10/15/2009

This rule may become effective on:

10/22/2009

Authorized by:

Jilene Whitby, Information Specialist

RULE TEXT

R590. Insurance, Administration.

R590-228. Submission of Credit Life and Credit Accident and Health Insurance Form and Rate Filings.

R590-228-2. Purpose and Scope.

(1) The purpose of this rule is to set forth the procedures for submitting:

(a) Credit life and credit accident and health insurance filings required by Section 31A-21-201;

(b) Credit life and credit accident and health insurance rate filings required by Section 31A-22-807, R590-91; and

(c) report filings as required[by R590-91].

(2) This rule applies to all credit life insurance and credit accident and health insurance including group contracts issued to nonresident policyholders, including trusts, when Utah residents are provided coverage by certificates of insurance.

R590-228-3. [ Documents Incorporated by Reference.

(1) The department requires that documents described in this rule shall be used for all filings.

(a) Actual copies may be used or you may adapt them to your word processing system.

(b) If adapted, the content, size, font, and format must be similar.

(2) The following documents are hereby incorporated by reference and are available at www.insurance.utah.gov.

(a) "NAIC Life, Accident and Health, Annuity, Credit Transmittal Document," dated March 1, 2007;

(b) "NAIC Uniform Life, Accident and Health, Annuity and Credit Coding Matrix," dated March 1, 2007;

(c) "NAIC Life, Accident and Health, Annuity, Credit Transmittal Document (Instructions)," dated March 1, 2007;

(d) "Utah Credit Life and Credit Accident and Health Filing Certification," dated July 2007;

(e) "Utah Annual Credit Life and Credit Accident and Health Insurance Filing Checklist," dated July 2007.

R590-228-4. ]Definitions.

In addition to the definitions of Section 31A-1-301, the following definitions shall apply for the purpose of this rule:

(1) "Certification" means a statement that the filing being submitted is in compliance with Utah laws and rules.

(2) "Data page" means the page or pages in a policy and certificate that provide the specific data for the insured detailing the coverage provided and may be titled by the insurer as schedule page, schedule of benefits and premiums, etc.

(3) "Electronic Filing" means[;

(a) ] a filing submitted via the Internet by using the ["]System for Electronic Rate and Form [f]Filing[: (], SERFF .[) System; or

(b) a filing submitted via the Internet by using the Sircon system; or

(c) A filing submitted via an email system.]

(4) "Eligible group" means a group that meets the definitions in Sections 31A-22-502 through 31A-22-508.

(5) "Endorsement" means a written agreement attached to a life insurance policy that alters a provision of the policy. An example is a company change of name.

(6) "File and Use" means a filing can be used, sold, or offered for sale after it has been filed with the department.

(7) "File for Approval" means a filing can be used, sold, or offered for sale after it has been filed and the filer has received written confirmation that the filing was approved.

(8) "Filer" means a person [or entity that]who submits a filing.

(9) "Filing," when used as a noun, means an item required to be filed with the department including:

(a) a policy;

(b) a rate, rate methodologies;

(c) a form;

(d) a document;

(e) an application;

(f) a report;

(g) a certificate;

(h) an endorsement;

(i) a rider; and

(j) an actuarial memorandum , demonstration, and certification.

(10) "Filing Objection Letter" means a letter issued by the commissioner when a review has determined the filing fails to comply with Utah law and rules. The filing objection letter, in addition to requiring correction of non-compliant items, may request clarification or additional information pertaining to the filing.

(11) "Filing status information" means a list of the states to which the filing was submitted, the date submitted, and the states' actions, including their responses

(12) "Issue Ages" means the range of minimum and maximum ages for which a policy or certificate will be issued.

(13) "Letter of Authorization" means a letter signed by an officer of the [insurer]licensee on whose behalf the filing is submitted that designates filing authority to the filer.

(14) "Market type" means the type of policy that indicates the targeted market such as individual or group.

(15) "Order to Prohibit Use" means an order issued by the commissioner that prohibits the use of a filing.

(16) "Rejected" means a filing is:

(a) not submitted in accordance with applicable laws or rules;[and]

(b) returned to the [insurer]licensee by the department with the reasons for rejection; and

(c) not considered filed with the department.

(17) "Rider" means a written agreement attached to a life insurance policy or certificate that adds a benefit. An example is a credit accident and health insurance rider.

(18) "Type of insurance" means a specific credit life and credit accident and health insurance product, as defined in the NAIC Coding Matrix, including, but not limited to, gross decreasing term, net decreasing term, level term, or truncated coverage.

(19) "Utah Filing Date" means the date provided to a filer by the Utah Insurance Department[,] that indicates a filing has been accepted[pursuant to this subsection 6 or 7].

R590-228-[ 5 ] 4 . General Filing Information.

(1) Each filing submitted must be accurate, consistent, and complete and contain all required documents in order for the filing to be processed in a timely and efficient manner. The commissioner may request any additional information deemed necessary.

(2) Licensee[s] and filer[s] are responsible for assuring that a filing is in compliance with Utah laws and rules. A filing not in compliance with Utah laws and rules [are]is subject to regulatory action under Section 31A-2-308.

(3) A filing that does not comply with this rule will be rejected and returned to the filer. A rejected filing:

(a) is not considered filed with the department;

(b) must be submitted as a new filing; and

(c) will not be reopened for purposes of resubmission.

(4) A prior filing will not be researched to determine the purpose of the current filing.

(5) The department does not review or proofread every filing.

(a) A [F]filing[s] may be reviewed:

(i) when submitted;

(ii) as a result of a complaint;

(iii) during a regulatory examination or investigation; or

(iv) at any other time the department deems necessary.

(b) If a filing is reviewed and is not in compliance with Utah laws and rules, a Filing Objection Letter or an Order [T]to Prohibit Use will be issued to the filer. The commissioner may require the filer to disclose deficiencies in forms or rating practices to affected insureds.

(6) Filing Correction.

(a) Filing corrections are considered informational.

(b) Filing corrections must be submitted within [30]15 days of the date ["Filed" with]the original filing was submitted to the department.

(c) A new filing is required if a [clerical]filing correction[s] is made more than [30-]15 days after the date ["Filed" with]the original filing was submitted to the department. The filer must reference the original filing in the filing description.

(7) If responding to a Filing Objection Letter or an Order to Prohibit Use, refer to R590-228-11 for instructions.

(8) Filing withdrawal. A filer must notify the department when withdrawing a previously filed form, rate, or supplementary information.

R590-228-[ 6 ] 5 . Filing Submission Requirements.

(1) All filings must be submitted as an electronic filing.

(a) All filers must use SERFF to submit a filing.

(b) All filings must comply with The "NAIC Uniform Life, Accident and Health, Annuity, and Credit Coding Matrix," dated January 1, 2009, and incorporated by reference. This form is available on the department's website, www.insurance.utah.gov.

(2) A filings must be submitted by market type and type of insurance.

(3) A filing may not include more than one type of insurance; or request filing for more than one [insurer]licensee.

(4) SERFF Filings.

(a) Filing Description. Do not submit a cover letter. On the [g]General [i]Information tab, complete the Filing Description section with the following information, presented in the order shown below.

(i) Provide a description of the filing including:

(A) the intent of the filing; and

(B) the purpose of each document within the filing.

(ii) Indicate if the filing:

(A) is new;

(B) is replacing or modifying a previous submission; if so, describe the changes made, if previously rejected the reasons for rejection, and the previous [filing's ]Utah Filed Date;

(C) includes [forms]documents for informational purposes; if so, provide the Utah Filed Date; or

(D) does not include the base policy; if so, provide the Utah Filed Date of the base policy and describe the effect on the base policy.

(iii) Identify if any of the provisions are unusual, controversial, or have been previously objected to, or prohibited, and explain why the provision is included in the filing.

(iv) Explain any change in benefits or premiums that may occur while the contract is in force.

(v) List the types of coverage to be provided, such as gross, net, full term, truncated and critical period.

(vi) Indicate whether the insurer has a Rating and Benefits Plan on file with the department.

(vii) List the issue ages, which means the range of minimum and maximum ages for which a policy will be issued.

(viii) Identify the intended market

(ix) Identify the types and durations of loans to be insured.

(x) Describe the methods of premium charge.

(b) Certification. The filer must certify that a filing has been properly completed AND is in compliance with Utah laws and rules. The "Utah Credit Life and Credit Accident and Health Filing Certification" must be properly completed, signed, and attached to the [s]Supporting [d]Documentation tab. A false certification may subject the licensee [or filer ]to administrative action.

(c) Domiciliary Approval and Filing Status Information. All filings for a foreign [insurer]licensee must include on the [s]Supporting [d]Documentation tab:

(i) copy of domicile approval for the exact same filing; or

(ii) filing status information which includes:

(A) a list of the states to which the filing was submitted;

(B) the date submitted; and

(C) summary of the states' actions and their responses; or

(iii) if the filing is specific to Utah and only filed in Utah, then state, "UTAH SPECIFIC - NOT SUBMITTED TO ANY OTHER STATE."

(d) Letter of Authorization.

(i) When the filer is not the [insurer]licensee, a letter of authorization from the [insurer]licensee must be attached to the [supplementary]Supporting [d]Documentation tab.

(ii) The [insurer]licensee remains responsible for the filing being in compliance with Utah laws and rules.

(e) Statement of Variability.[Any item or provision on the data page or within the form that is variable must be contained within the brackets.]

(i) [List the ranges of variable items or factors within the brackets.]A statement of variability must be attached to the Supporting documentation tab and certify:

(A) the final form will not contain brackets denoting variable data;

(B) the use of variable data will be administered in a uniform and non-discriminatory manner and will not result in unfair discrimination;

(C) the variable data included in this statement will be used on the referenced forms;

(D) any changes to variable data will be submitted prior to implementation.

(ii) [Each variable item must be identified and explained in a statement of variability.]Variable data are denoted in brackets and are defined, either by imbedding in the form, or by a separate form identified by its own form number and edition date. Variable data submitted as a separate form must be in a manner that follows the construction of the form, by page and paragraph, or page and footnote.

(iii) [If the information contained within the brackets changes, the form must be refilled.]Variable data must be reasonable, appropriate and compliant.

(iv) Use of unauthorized variable data is prohibited.

(f) Items being submitted for filing.

(i) [Any]All forms must be attached to the form schedule tab.

(ii) [Any]All rating documentation, including actuarial memorandums and rate schedules, must be attached to the [r]Rate/[r]Rule [s]Schedule tab.

(iii) Actuarial Memorandum, Demonstration, and Certification of Compliance. An actuarial memorandum and demonstration with sample rate calculations and a certification of compliance with Utah law are required in each filing. The memorandum must be currently dated and signed by the actuary.

(5) [Sircon Filings.

(a) Transmittal. The "NAIC Life, Accident and Health, Annuity, Credit Transmittal Document," as provided in R590-228-3, must be properly completed.

(i) Completed the transmittal by using the following:

(A) NAIC Life, Accident and Health, Annuity, Credit Transmittal Document (Instructions); and

(B) NAIC Uniform Life, Accident and Health, Annuity and Credit Coding Matrix. (ii) Do not submit the documents described in Section (a)(i) (A) and (B) with the filing.

(b) Filing Description. Do not submit a cover letter. In Section 15 of the transmittal, complete the Filing Description with the following information presented in the order shown below.

(i) Provide a description of the filing.

(ii) Indicate if the filing:

(A) is new;

(B) is replacing or modifying a previous submission; if so, describe the changes made, if previously rejected the reasons for rejection, and the previous filing's Utah Filed Date;

(C) includes forms for informational purpose; if so, provide the Utah Filed Date; or

(D) does not include the base policy; if so, provide the Utah Filed Date of the base policy and describe the effect on the base policy.

(iii) Identify if any of the provisions are unusual, controversial, or have been previously objected to, or prohibited, and explain why the provision is included in the filing.

(iv) List the types of coverage to be provided, such as gross, net, full term, truncated and critical period.

(v) Identify and describe any new or nonstandard benefits or rating methodologies.

(vi) Indicate whether the insurer has a Rating and Benefits Plan on file with the department.

(vii) Explain any change in benefits or premiums that may occur while the contract is in force.

(viii) List the issue ages, which means the range of minimum and maximum ages for which a policy will be issued.

(ix) Identify the types and durations of loans to be insured.

(x) Describe the methods of premium charge.

(c) Certification. The filer must certify that a filing has been properly completed AND is compliance with Utah laws and rules. The "Utah Credit Life and Credit Accident and Health Filing Certification "must be properly completed and signed. A false certification may subject the licensee or filer to administrative action.

(d) Domiciliary Approval and Filing Status Information. All filings for a foreign insurer must include:

(i) a copy of domicile approval for the exact same filing;

(ii) a filing status information which includes:

(A) a list of the states to which the filing was submitted;

(B) the date submitted; and

(C) summary of the states' actions and their responses; or

(iii) if the filing is specific to Utah and only filed in Utah, then section 14 of the transmittal must be completed stating, "UTAH SPECIFIC - NOT SUBMITTED TO ANY OTHER STATE."

(e) Group Questionnaire. All group filings must include signed and fully completed "Utah Life and Annuity Group Questionnaire".

(f) Letter of Authorization.

(i) When the filer is not the insurer, include a letter of authorization from the insurer.

(ii) The insurer remains responsible for the filing being in compliance with Utah laws and rules.

(g) Statement of Variability. Any information that is variable must be bracketed in the form and must be explained in a statement of variability. If after filing, the information contained within the brackets changes, the filing must be refiled.

(h) Items being submitted for filing. Any form or rate items submitted for filing must be attached to the product forms tab.

(i) Actuarial Memorandum, Demonstration, and Certification of Compliance. An actuarial memorandum with sample rate calculations and a certification of compliance are required in each filing. The memorandum must be currently dated and signed by the actuary representing the insurer.

(j) Rates. All rates must be filed prior to use. All rates must be in compliance with 31A-22-807 and R590-91. A rate filing is required with each form filing.

(6) ] [r]Refer to each applicable Section of this rule for additional procedures on how to submit forms, rates, and reports.

R590-228-[ 7 ] 6 . Procedures for Filings.

(1) Forms in General.

(a) Forms are "File and Use" filings.

(b) Each form must be identified by a unique form number. The form number may not be variable.

(c) Forms must contain a descriptive title on the cover page.

[(c)](d) Forms must be in final printed form or printer's proof format. Drafts may not be submitted.

[(d) Specific sections may be filed with variable data by placing brackets around affected information. Variable data must be identified within the specific section, or on a separate sheet included with the submission

](e) Blank spaces within the forms must be completed in John Doe fashion to accurately represent the intended market, purpose, and use.

(f) All John Doe data in the forms, including the data page, premium rates and benefits, must be accurate and consistent with the actuarial memorandum and rate schedule.

(2) Policy Filings.

(a) Each type of insurance must be filed separately.

(b) A policy filing consists of one policy form, including its related forms, including the application, enrollment form, certificate, actuarial memorandum, certification, and rate schedule.

(c) Only one policy filing for a single type of insurance may be filed.

(3) Rider or Endorsement Filings.

(a) Related riders or endorsements may be filed together.

(b) A single rider or endorsement that affects multiple forms may be filed in the Filing Description and references all affected forms.

(c) The filing[A rider or endorsement that provides benefits] must include[all filing documents required for a policy filing including]:

[(a)](i) a listing of the base policy form number, title and Utah Filed Dates;

[(b)](ii) a description of how [the]each rider or endorsement affects the base policy; and

[(c)](iii) appropriate actuarial memorandum and rate schedule.

(4) Application Filings.

(a) [An]Each application or enrollment form may be submitted as a separate filing or filed with its related policy [and]or certificate filing.

(b) If an application has been previously filed or is filed separately, an informational copy of the application must be included with a policy or certificate filing.

(5) Rates. Rates are considered "File for Approval".

R590-228-[ 8 ] 7 . Additional Procedures for Credit Life and Credit Accident and Health Form and Rate Filings.

(1) [Insurers]A Licensee filing Credit Life and Credit Accident and Health are advised to review the following code sections and rules prior to submitting a filing:

(a) Section 31A-21 Part III, "Specific Clauses in Contracts;"

(b) Section 31A-22 Part IV, "Life insurance and Annuities;"

(c) Section 31A-22 Part V, "Group Life Insurance;"

(d) Section 31A-22 Part VI, "Accident and Health Insurance;"

(e) Section 31A-22 Part VIII, "Credit Life and Accident and Health;"

(f) R590-91, "Credit Life and Disability;" and

(g) R590-191, "Unfair Life Insurance Claims Settlement Practice;"

(h) R590-192, "Unfair Health and Disability Claims Settlement Practices."

(2) A policy must be included with each certificate filing along with a master application and enrollment form.

(3) Actuarial Memorandum, Demonstration and Certification of Compliance. Each form and rate fling must include an actuarial memorandum, demonstration, and certification of compliance with Utah laws, signed and dated by the actuary representing the insurer.

(a) Actuarial memorandum must include a description of the following:

(i) types of coverage, such as gross or net decreasing, single or joint life, full term or truncated, critical period;

(ii) types of loans to be insured, such as open end, closed end,

(iii) types of premium charge: single premium, monthly outstanding balance, or other method explained in detail;

(iv) durations of loans and durations of coverage. Refer to 31A-22-801(2)(a);

(v) rates per unit, rating and premium methodologies including:

(A) formulas used for each type of coverage and premium method; and

(B) sample calculations for each type of coverage and premium method;

(vi) an explanation of whether the company has a Rating and Benefits Plan on file and if so, whether the submitted rates are consistent with the filed plan;

(vii) demonstration of compliance with applicable code and rules;

(viii) refund methods and calculation including formulas for each type of coverage; and

(ix) reserve bases including methods used.

(b) The actuarial certification must include certification of compliance that formulas and methods used produce rates that are in compliance with applicable Utah laws and rules for each type of coverage and duration in the filing.

(4) Rate Schedules.

(a) Rate schedules must be included for each type of coverage and for representative durations.

(b) Rates must be identified as prima facie rates, rates previously filed for compliance with the Rating and Benefits Plan required in R590-91-10, or deviated rates submitted pursuant to 31A-22-807, or rates on nonstandard coverage pursuant to R590-91-5.

(5) All benefits must be reasonable in relation to the premium charge. Insurers filing for approval of a rate higher than prima facie rates must comply with the requirements of 31A-22-807 and R590-91-10. Include a demonstration that the rates are reasonable in relation to the benefits.

R590-228-[ 9 ] 8 . Insurer Annual Reports.

[(1) ]All [insurer]licensee annual reports must be properly identified and must be filed separately from other filings. Each annual report must be submitted when requested.[along with the properly completed report checklist.

(2) "Credit Life and Credit Accident and Health Annual Report."

(a) Filings must comply with R590-91-10. Every Credit Life, and Credit Accident and Health insurer marketing must file annually.

(b) The report must include:

(i) Utah Credit Life, and Credit Accident and Health Report Checklist;

(ii) Annual report filings are due May 1 each year.]

R590-228-[ 10 ] 9 . Correspondence and Status Checks.

(1) Correspondence. When corresponding with the department, [filers must ]provide sufficient information to identify the original filing[. Information should include]:

(a) type of insurance;

(b) date of filing;

(c) form numbers; and

(d) [Submission method, SERFF or Sircon; and

(e) ] SERFF tracking number.

(2) Status Checks.

(a) A complete filing is usually processed within 45 days o[r]f receipt.

(b) A filers can request the status of its filing [by telephone, or email ]60 days after the date of submission. A response will not be provided to a status request prior to 60 days.

R590-228-[ 11 ] 10 . Responses.

(1) Response to a Filing Objection Letter. [A response to]When responding to a Filing Objection Letter a filer must[include]:

(a) [a cover letter]provide an explanation identifying all changes made;

(b) [revised documents with all changes highlighted;]include an underline and strikeout version for each revised document;[and]

(c) [revised documents incorporating all changes without highlights]include a final version of revised documents that incorporates all changes; and

(d) for filing submitted in SERFF, attach the documents in Subsections R590-228-10(1)(b)(c) to appropriate Form Schedule or Rate/Rule Schedule tab.

(2) Response to an Order to Prohibit Use.

(a) An Order to Prohibit Use becomes final 15 days after the date of the Order.

(b) Use of the filing must be discontinued no[t] later than the date specified in the Order.

(c) To contest an Order to Prohibit Use, the commissioner must receive a written request for a hearing no[t] later than 15 days after the date of the Order.

(d) A new filing is required if the [company]licensee chooses to make the requested change s addressed in the Filing Objection Letter. The new filing must reference the previously prohibited filing.

R590-228-[ 12 ] 11 . Penalties.

Persons found, [after a hearing or other regulatory process, ]to be in violation of this rule shall be subject to penalties as provided under Section 31A-2-308.

R590-228-[ 13 ] 12 . Enforcement Date.

The commissioner will begin enforcing the revised provision s of this rule [May 1, 2004]upon 15 days from the effective date of this rule.

R590-228-[ 14 ] 13 . Severability.

If any provision of this rule or its[the] application [of it ]to any person or [circumstance]situation is [for any reason ]held to be invalid, that invalidity shall not affect any other provision or[the remainder of the rule and the] application of this rule which can be given effect without the invalid[the] provision or application, and to this end the provisions[to other persons or circumstances may not be affected by it]of this rule are declared to be severable.

KEY: credit insurance filings

Date of Enactment or Last Substantive Amendment: [ July 30, 2007 ] 2009

Notice of Continuation: March 26, 2009

Authorizing, and Implemented or Interpreted Law: 31A-2-201; 31A-2-201.1; 31A-2-202

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