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RULE 10.11B -
ELECTRONIC FUNDS TRANSFER PLAN
The purpose of the Electronic
Funds Transfer Plan is to provide a convenient premium payment plan with
automatic withdrawals from the policyholder's account with a participating
financial institution. This payment plan is not available for a
mortgagee paying the premium for a policyholder.
1) Definitions
The terms used in this
rule are defined as follows:
A. Carryover
- any outstanding balance remaining at the end of the previous policy
period provided it exceeds the waiver of premium amount.
B. Accumulated
Credit - any credit adjustment.
C. Remaining Payments
- number of months in the policy period minus the number of Monthly
Premiums paid during the policy period to date.
D. Monthly Premium
(initial payment only) - sum of the policy period premium divided
by the number of months in the policy period less any Accumulated Credit.
E. Monthly Premium
(subsequent payments only) - total outstanding balance divided by
the number of Remaining Payments less any Accumulated Credit.
F. Payment Plan
Deposit (new business only) - 2 Monthly Premiums plus the Transaction
Fee. If payment is made by Electronic Funds Transfer and the application
is submitted at least 30 days prior to policy effective date, the Payment
Plan Deposit is 1 monthly premium plus the Transaction Fee.
G. Payment Plan
Deposit (previously insured only) - 2 Monthly Premiums plus the
Transaction Fee plus any Carryover less any Accumulated Credit.
H. Transaction
Fee - the fee to a policyholder for making payments under the Electronic
Funds Transfer Plan.
2) Transaction
Fee
The Transaction Fee
is $1. It will apply to each electronic funds transfer payment.
3) Establishing
Electronic Funds Transfer Plan
A. New Business
The applicant completes
the Electronic Funds Transfer Preauthorization Agreement (Form
#5860) and pays the Payment Plan Deposit with the application. Monthly
Premiums will be deducted from their account each month beginning approximately
60 days after the effective date until the premium is paid in full.
If application was
submitted at least 30 days in advance with only 1 Monthly Premium, deductions
will begin 30 days after the effective date.
Monthly Premiums will
be deducted from their account until the policy is cancelled or the
Electronic Funds Transfer Plan is terminated.
The Monthly Premium
will be adjusted to include policy changes as they occur. Credits will
be applied immediately and debits will be spread among the Remaining
Payments.
The balance due for
the policy period may be paid in full at any time at the option of the
policyholder.
B. Existing Business
- Renewals
The Electronic Funds
Transfer Plan may be established upon renewal of an existing
policy. The insured completes the Electronic Funds Transfer Preauthorization
Agreement (Form
#5860) which is forwarded with an RFC requesting the change in billing
plan to the Customer Care Center. These forms must be received at
least 10 days prior to the renewal date. Monthly Premiums will be
deducted from their account until the policy is cancelled or the Electronic
Funds Transfer Plan is terminated.
The Monthly Premium
will be adjusted to include policy changes as they occur. Credits will
be applied immediately and debits will be spread among the Remaining
Payments.
The balance due for
the policy period may be paid in full at any time at the option of the
policyholder.
C. Existing Business
- Mid Term
The Electronic Funds
Transfer Plan may be established during the policy period by changing
the payment plan from the Quarterly Payment Plan by RFC. The insured
completes the Electronic Funds Transfer Preauthorization Agreement (Form
#5860). This is forwarded with a RFC requesting the change in billing
plan to the Customer Care Center. The forms must be received at least
10 days prior to the next quarterly payment due date. Once a 10
day Notice of Cancellation for non-payment of premium is issued, the
payment plan CANNOT be changed to the Electronic Funds Transfer
Plan for the payment.
The balance due on
the policy will be divided by the number of remaining months in the
policy period. That Monthly Premium will be deducted from their account
until the next renewal period. Upon renewal, a recalculated Monthly
Premium will be deducted from their account until the policy is cancelled
or the Electronic Funds Transfer Plan is terminated.
4) Payment Schedule
A payment schedule
will be indicated on the Declarations Certificate and will include the
following information:
A. Amount of withdrawals
from the account.
B. Approximate date of each withdrawal.
5) Cancellation
for Non-Payment of Premium
If notice is received
from a financial institution that sufficient funds are not available
for the Monthly Premium, the Electronic Funds Transfer Plan will be
terminated and the payment plan will be changed to the Quarterly Payment
Plan. A 10 day Notice of Cancellation will be sent to the policyholder.
Payment of the amount due on the Notice of Cancellation must be received
by the date and time indicated or the policy is lapsed and coverage
is terminated.
All earned premium
is calculated on a pro-rata basis.
6) Terminating
Electronic Funds Transfer Plan
The Electronic Funds
Transfer Plan may be terminated by the policyholder at any time. The
following circumstances will cause the termination of the Electronic
Funds Transfer Agreement:
A. Notice from the
financial institution that sufficient funds are not available for
debit to cover the Monthly Premium.
B. The account at
the financial institution is closed or transferred to a different
number.
C. The policy is
cancelled or rewritten.
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