New Mexico is imposing a 10% reduction on the cost of credit life insurance and credit accident and health insurance policies sold to borrowers in the state.
New Mexico requires rate reductions when the combined loss ratios for credit life insurers or credit health insurers fall under 90%, officials from the New Mexico Public Regulation Commission note in Insurance Division Bulletin Number 2007-008.
The loss ratios in each market were under 90% in 2006, officials report.
The public regulation commission is responding by cutting the prima facie rates for credit life insurance to 36 cents per year for each $100 in initial insured indebtedness, if the indebtedness is payable in equal monthly installments.
For credit accident and health insurance sold in connection with open-ended transactions and payable after the 14th day of disability, the rate now will be 15 cents per month per $100 of outstanding balance insured indebtedness, if coverage is retroactive to the first day.
A copy of the bulletin is available