SECTION 3.5601. Deviation by Case Allowed

Two types of rate deviation are allowed, automatic deviation and approved deviation as defined in §3.5002 of this title (relating to Definitions).

(1) Automatic Deviation. An insurer electing to deviate from the presumptive premium rate established by the commissioner shall file with the commissioner the insurer's proposed rate for credit life and credit accident and health insurance. On filing the rate with the commissioner, the insurer may use the filed rate until the insurer elects to file a different rate. Except as provided in paragraph (2) of this section, an insurer may not use a rate that is more than 30% higher or 30% lower than the presumptive premium rate.

(2) Approved Deviation by Case. Notwithstanding the determination by the Commissioner of Insurance of presumptive premium rates which are reasonable in relation to the benefits of a policy providing the coverage to which the rates are applicable, an insurer who has experienced excessive loss ratios or who fails to develop the minimum loss ratio as defined in §3.5202 of this title (relating to Reasonable Relation of Benefits to Premiums for Approved Deviations), for a case consisting of a single account or combination of accounts, as defined in §3.5002 of this title, will be permitted, at its own request, or may be required by the commissioner, to adjust the premium rate or premium rate schedule for such case in accordance with the deviation procedures set out in this subchapter. An approved deviation request shall be presented with form CI-DRF and §3.5602 of this division (relating to Request for an Approved Deviated Premium Rate).

(3) The commissioner may disapprove a request for an approved deviated rate on the grounds that the rate is not actuarially justified, or is unjust, unreasonable, excessive or inadequate. A rate is excessive if it is unreasonably high for the coverage provided and a reasonable degree of competition does not exist with respect to the classification to which the rate would be applicable. A rate is inadequate if the rate is insufficient to sustain projected losses and expenses, or the rate substantially impairs, or is likely to substantially impair, competition with respect to the sale of the product.

(4) The insurer may use the rate if the commissioner does not disapprove it before the 60th day after the date the insurer filed the rate.

Source Note: The provisions of this §3.5601 adopted to be effective October 1, 1980, 5 TexReg 2772; amended to be effective June 18, 2003, 28 TexReg 4558; amended to be effective June 7, 2005, 30 TexReg 3210