OAR 836-060-0036
Refund Formulas
(1)
An insurer shall file for approval by the Director its refund formulas prior to their use. The following methods are considered appropriate for the plans described:(a)
Pro Rata Method. The pro rata unearned gross premium method shall be used for level term credit life insurance or credit health insurance where under the insured is covered for a constant maximum indemnity for a given period of time, after which the maximum indemnity begins to decrease in even amounts per month, and credit insurance coverage under which premiums are collected from the debtor on a basis other than the single premium basis;(b)
Actuarial method commonly referred to as the Rule of Anticipation. A refund of unearned premium used for decreasing term credit life insurance may be made as provided in this subsection. The amount of the refund shall be not less than the total premium, less the greater of:(A)
Ten percent of the premiums or $75, whichever is less; or(B)
The premium earned to the installment due date of the loan nearest the date of prepayment, for the periods of time the loan balances were actually outstanding. For purposes of refund computations under this paragraph, the installment due date of the loan preceding the date of prepayment shall be considered to be nearest if prepayment occurs 15 days or less after that installment date. If prepayment occurs more than 15 days after the preceding installment due date, the next succeeding installment due date shall be considered to be nearest to the date of prepayment.(c)
Any method that develops refunds that are at least as favorable to the debtor as refunds based on the actuarial method described in subsection (b) of this section.(2)
In the event of termination, no charge for credit insurance may be made for the first 15 days of a loan month, and a full month may be charged for 16 days or more of a loan month.(3)
The refund formula shall be set forth in the individual policy or group certificate.(4)
The requirement of ORS 743.378 (Charges and refunds to debtor) that refund formulas be filed with the Director is fulfilled by inclusion of the refund formulas in the individual policy or group certificate filed with the Director.(5)
No refund of $5 or less need be made.
Source:
Rule 836-060-0036 — Refund Formulas, https://secure.sos.state.or.us/oard/view.action?ruleNumber=836-060-0036.