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HD 4519

A communication from the Division of Insurance (see Section 117C of Chapter 175 of the General Laws) submitting its Credit Insurance report for calendar year 2023

194th Legislature (2025-2026)

HD 4519 transmits the 2023 credit insurance report, showing a market decline to about $2 million earned premium and concentration among 3 insurers under DOI oversight.

Placed on file
1
WeVote Research Nonpartisan
Bill Summary · HD 4519

Summary of Bill HD 4519: A communication from the Division of Insurance submitting its Credit Insurance Report for calendar year 2023

Overview

  • Bill Number: HD 4519
  • Title: A communication from the Division of Insurance (see Section 117C of Chapter 175 of the General Laws) submitting its Credit Insurance report for calendar year 2023
  • Purpose: To formally submit and place on file the Massachusetts Division of Insurance (DOI) Credit Insurance Report for the 2023 calendar year, as required by statute.
  • Status: Placed on file
  • Introduced: April 10, 2025
  • Classification: Proposed bill

What the bill does

  • The bill transmits the 2023 Credit Insurance Report prepared by the DOI’s Health Care Access Bureau (HCAB) under the supervision of Acting Commissioner Kevin P. Beagan.
  • The report fulfills the statutory requirement under M.G.L. c. 175, §117C(b) to collect and summarize data from insurers offering credit insurance in Massachusetts for the prior year.
  • It provides a government-compiled summary of the performance and regulation of credit insurance (excluding credit property insurance).

Key provisions and findings in the 2023 Credit Insurance Report

  • Market size and trends:
    • Credit insurance market in 2023 declined to about $2 million in earned premium across the state.
    • The drop is attributed largely to competition from debt cancellation/suspension products offered by banking organizations, which are not considered insurance and fall under federal OCC regulation.
    • The OCC regulates debt cancellation/suspension agreements under 12 CFR Part 37.
  • Definitions and scope:
    • Credit insurance in this context includes credit life, credit disability income, and credit involuntary unemployment insurance.
    • The report excludes credit property insurance from its scope.
  • Product-specific standards and loss ratios:
    • Credit Life Insurance (Massachusetts requirements per M.G.L. c. 175, §110):
    • Death benefit capped at $125,000
    • Coverage limited to a maximum of 15 years
    • Coverage limited to remaining outstanding debt
    • Coverage ends when the debt is discharged
    • Loss ratio target: at least 50%
    • Credit Disability Income Insurance (M.G.L. c. 175, §110):
    • Monthly benefit equals the debtor’s minimum monthly payment
    • Possible elimination period; benefits may be retroactive
    • Loss ratio target: at least 55%
    • Credit Involuntary Unemployment Insurance (M.G.L. c. 175, §110):
    • Monthly benefit equals the loan’s minimum monthly payment
    • Possible elimination period; benefits may be retroactive
    • Loss ratio target: at least 60%
  • Regulatory framework and rate setting:
    • For Motor Vehicle Dealer (MVD) credit insurance, rates for 2023–2025 were set every three years by the DOI using 2020–2022 experience, per Division Bulletin 2022-10.
    • For all other classes, insurers must file rate filings that comply with statutory loss ratio standards.
    • The commissioner conducts a triennial computation of deviated case rates for credit life and credit accident and health insurance sold through MVD outlets.
  • Market concentration and participants:
    • As of 2023, only three insurers were actively writing new credit insurance: American National Insurance Company, CFMG Life Insurance Company, and Minnesota Life Insurance Company.
    • Thirteen insurers were servicing closed blocks of coverage.
    • More than 96% of earned premiums in 2023 came from these three companies, indicating substantial market concentration.
  • Data and reporting methodology:
    • Insurers must file claims experience and loss ratio data annually.
    • The report provides methodology for calculating incurred claims, earned premiums, and loss ratios for each insurer.
    • The report notes that claims data for credit involuntary unemployment insurance were not fully requested in the same format.

Who is affected

  • Primary: Insurance carriers offering credit insurance in Massachusetts (life, disability, and involuntary unemployment products) and those servicing already closed blocks.
  • Indirect: Debtors (consumers) who purchase credit insurance; lenders (creditors) who offer these products in conjunction with loans; banking institutions offering non-insurance debt cancellation/suspension products regulated by the OCC.
  • Regulatory bodies: Massachusetts Division of Insurance, and the federal Office of the Comptroller of the Currency for related non-insurance products.

Procedural and timeline notes

  • This bill is a formal transmission of the 2023 Credit Insurance Report, as required by statute.
  • It does not appear to enact new policy changes but provides a transparent, statutory-era audit of the credit insurance market.
  • Next procedural steps: The bill (HD 4519) remains listed as placed on file; there are no specified future actions beyond the ongoing statutory reporting requirements and subsequent DOI reporting cycles.

Potential impact and takeaways

  • Provides a concise, statutory-based snapshot of Massachusetts credit insurance activity for 2023.
  • Highlights market decline and regulatory environment, including competition from non-insurance debt cancellation/suspension products.
  • Reaffirms loss ratio standards and rate-setting processes for credit insurance products in Massachusetts.
  • Useful for policymakers, industry stakeholders, and consumers seeking understanding of regulatory oversight and market dynamics in credit insurance.

Compiled from official sources — confirm details with the bill’s official record.

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