                                 CODE OF VIRGINIA

CREDIT ACCIDENT AND SICKNESS INSURANCE RATES (§ 38.2-3727)

A. The Commission shall, based on a morbidity study, promulgate seven-,
fourteen- and thirty-day retroactive and nonretroactive credit accident and
sickness insurance premium rates which will reasonably be expected to produce
the loss ratio as required by subsection E of &#xA7; 38.2-3725. These prima
facie rates will be published by the Commission no later than September 1, 1992,
and will be effective on or after January 1, 1993. After this date, the premium
charged in connection with any credit accident and sickness insurance policy or
certificate issued in this Commonwealth may not exceed the then-published prima
facie rate as set forth in this section and as may be adjusted pursuant to
&#xA7; 38.2-3730.
			The morbidity study shall be based on policies and certificates issued in
this Commonwealth for the past three years, the premiums charged for those
contracts and the experience produced by those contracts. The Commission may
also take into consideration the reserves held on these contracts and the
methods used to produce those reserves and any other information which the
Commission in its discretion may consider necessary to produce a credible
morbidity study.

B. The benefits provided by any credit accident and sickness insurance form
shall be deemed reasonable in relation to the premium charged or to be charged
if the rates do not exceed the rates initially published by the Commission
pursuant to subsection A of this section, except as such rates are modified
pursuant to the requirements of &#xA7; 38.2-3730.

C. If premiums are paid on the basis of a premium rate per month per $1,000 of
outstanding insured indebtedness, they shall be computed according to the
following formula or according to a formula approved by the Commission which
produces rates actuarially equivalent to the single premium rates:
			Where Spn = Single Premium Rate per $100 of initial insured indebtedness
repayable in n equal monthly installments.
			Op = Monthly Outstanding Balance Premium Rate per $1,000.
			n = Original repayment period, in months.

D. A credit accident and sickness insurance form may not be issued with a
waiting period, retroactive or nonretroactive, which differs from the waiting
periods set forth in this section.

E. The premium rates in subsection B shall apply to policies providing credit
accident and sickness insurance to be issued with or without evidence of
insurability, to be offered to all eligible debtors, and containing:

   1. No provision excluding or denying a claim for disability resulting from
   preexisting conditions except for those conditions for which the insured
   debtor received medical advice, diagnosis or treatment within six months
   preceding the effective date of the debtor&#8217;s coverage and which caused
   loss within the six months following the effective date of coverage. The
   effective date of coverage for each part of the insurance attributable to a
   different advance or charge to an open-end credit account is the date on which
   the advance or charge is posted to the plan account.

   2. No other provision which excludes or restricts liability in the event of
   disability caused in a specific manner except that it may contain provisions
   excluding or restricting coverage in the event of normal pregnancy and
   intentionally self-inflicted injuries.

   3. No actively-at-work requirement more restrictive than one requiring that
   the debtor be actively at work at a full-time gainful occupation on the
   effective date of coverage. &#8220;Full-time&#8221; means a regular work week
   of not less than thirty hours. A debtor shall be deemed to be actively at work
   if absent from work due solely to regular day off, holiday or paid vacation.

   4. No age restrictions, or only age restrictions making ineligible for
   coverage debtors sixty-five or over at the time the indebtedness is incurred
   or debtors who will have attained age sixty-six or over on the maturity date
   of the indebtedness.

   5. A daily benefit equal in amount to one-thirtieth of the monthly benefit
   payable under the policy for the indebtedness.

   6. A definition of &#8220;disability&#8221; which provides that during the
   first twelve months of disability the insured shall be unable to perform the
   duties of his occupation at the time the disability occurred, and thereafter
   the duties of any occupation for which the insured is reasonably fitted by
   education, training or experience.

   7. A provision written in connection with an open-end credit plan which may
   provide for the cessation of insurance or reduction in the amount of insurance
   upon attainment of an age not less than sixty-five.

F. Joint coverage on any of the bases in this section shall not exceed 165
percent of the rates applicable to that type of coverage.

HISTORY: 1992, c. 586; 1995, c. 167.