2372

LAWS OF MARYLAND

Ch. 865

in default beyond the grace period for payment, the
insurer will advance, on proper assignment or pledge of
the policy and on the sole security thereof, at a
specified rate of interest not exceeding an effective
rate of six percent (6%) per annum, an amount equal to
or, at the option of the party entitled thereto, less
than the loan value of the policy. The loan value of
the policy shall be at least equal to the cash surrender
value at the end of the then current policy year,
provided that the insurer may deduct, either from such
loan value or from the proceeds of the loan, any existing
indebtedness not already deducted in determining such
cash surrender value including any interest then accrued
but not due, any unpaid balance of the premium for the
current policy year, and interest on the loan to the end
of the current policy year. The policy may also provide
that if interest on any indebtedness is not paid when due
it shall then be added to the existing indebtedness and
shall bear interest at the same rate, and that if and
when the total indebtedness on the policy, including
interest due or accrued, equals or exceeds the amount of
the loan value thereof, then the policy shall terminate
and become void, but not until at least 30 days notice
shall have been mailed by the insurer to the last known
address of the insured or policy owner and of any
assignee of record at the home office of the insurer.
The policy shall reserve to the insurer the right to
defer the granting of a loan, other than for the payment
of any premium to the insurer, for six (6) months after
application therefor. The policy[, at the insurer's
option, may] SHALL provide for automatic premium loan,
subject to an election of the party entitled to elect.

(B) This section shall not apply to term policies
nor to term insurance benefits provided by rider or
supplemental policy provisions, or to industrial life
insurance policies.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act
shall take effect July 1, 1976.

Approved May 17, 1976.

CHAPTER 866

(House Bill 2104)

AN ACT concerning

Worcester County — Alcoholic Beverages
(County Liquor Dispensary)