This bulletin is directed to all insurers engaged in the business of selling credit insurance in the state of Indiana. Pursuant to 760 IAC 1-5.1-9, the Commissioner will, on a triennial basis, review the loss ratio standards and the prima facie rates contained in Rule 5.1.

In the review of the loss ratio standards, the Commissioner shall:

(1) determine the rate of expected claims on a statewide basis;

(2) compare such rate of expected claims with the rate of actual claims for the preceding three years determined from the incurred claims and earned premiums at prima facie rates reported in the annual statement supplement or other available source; and

(3) publish in the Indiana Register the adjusted actual statewide prima facie rates to be used by insurers during the next triennium.

In regard to discount rates, the Commissioner shall, on a triennial basis, review the discount rates for interest included in the formulae in 760 IAC 1-5.1-6 and 760 IAC 1-5.1-7. There shall be an adjustment to those discount rates to equal the average of the rates being paid at that time on three year United States Treasury notes as reported in the Wall Street Journal on the last day of sale in the most recent three calendar years. The Commissioner shall publish the revised discount rates in the Indiana Register. If the Commissioner determines, at the conclusion of the triennial review, that the rate adjustment is de minimis, then the discount rate will not be changed.

The applicable provisions of 760 IAC 1-5.1 were effective January 1, 2003, and rates were reviewed in 2006 (see Bulletin 144). As of December 31, 2008, three new years of experience became available. Accordingly, the Department's triennial review is below.

Pursuant to 760 IAC 1-5.1-9, every three years the discount rate is to be adjusted based on the sales of the three year Treasury Notes on the last day of the last three calendar years. The rates paid at the last day of 2006, 2007, and 2008 are listed below:

For monthly outstanding balance basis, sixty cents ($0.60) per month per one thousand dollars ($1,000) of outstanding insured debt on single life and one dollar ($1) per month per one thousand dollars ($1,000) of outstanding insured debt on joint life if premiums are payable on a monthly outstanding balance basis.

INDIANA DEPARTMENT OF INSURANCE

_____________________________________

Carol Cutter, Commissioner

DIN: 20091104-IR-760090867NRA

Composed: May 04,2024 8:29:14AM EDT

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