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2025
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HARRY HUGHES, Governor
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(A) (1) IN THIS SECTION, "PUBLISHED MONTHLY AVERAGE" MEANS:
(1) MOODY'S CORPORATE BOND YIELD AVERAGE - MONTHLY
AVERAGE CORPORATES AS PUBLISHED BY MOODY'S INVESTOR'S SERVICE,
INC. OR ITS SUCCESSOR; OR
(2) IF THE MOODY'S CORPORATE BOND YIELD AVERAGE -
MONTHLY AVERAGE CORPORATES IS NOT PUBLISHED, A SUBSTANTIALLY
SIMILAR AVERAGE THAT THE COMMISSIONER ESTABLISHES BY REGULATION.
(B) LIFE INSURANCE POLICIES ISSUED ON OR AFTER JULY 1,
1983, SHALL PROVIDE FOR POLICY LOAN INTEREST RATES AS FOLLOWS
EITHER:
(1) A PROVISION PERMITTING A MAXIMUM INTEREST RATE
THAT DOES NOT EXCEED AN EFFECTIVE ANNUAL RATE OF 8 PERCENT; OR
(2) A PROVISION PERMITTING AN ADJUSTABLE MAXIMUM
ANNUAL INTEREST RATE ESTABLISHED FROM TIME TO TIME BY THE LIFE
INSURER AS PERMITTED BY LAW.
(C) THE ANNUAL RATE OF INTEREST CHARGED ON A POLICY LOAN
MADE UNDER SUBSECTION (B)(2) OF THIS SECTION MAY NOT EXCEED THE
HIGHER OF:
(1) THE PUBLISHED MONTHLY AVERAGE FOR THE CALENDAR
MONTH ENDING 2 MONTHS BEFORE THE DATE ON WHICH THE RATE IS
DETERMINED; OR
(2) THE ANNUAL RATE USED TO COMPUTE THE CASH
SURRENDER VALUES UNDER THE POLICY DURING THE APPLICABLE PERIOD
PLUS i PERCENT.
(D) IF THE MAXIMUM RATE OF INTEREST IS DETERMINED UNDER
SUBSECTION (B)(2) OF THIS SECTION, THE POLICY SHALL INCLUDE
PROVISIONS THAT DISCLOSE THE FREQUENCY AT WHICH THE RATE WILL BE
DETERMINED FOR THE POLICY.
(E) THE MAXIMUM ANNUAL RATE FOR EACH POLICY MUST BE
DETERMINED AT REGULAR INTERVALS AT LEAST ONCE EVERY 12 MONTHS,
BUT NOT MORE FREQUENTLY THAN ONCE IN ANY 3 MONTH PERIOD.
(F) AT THE INTERVALS SPECIFIED IN THE POLICY:
(1) THE RATE CHARGED MAY BE INCREASED IF THE INCREASE
AS DETERMINED UNDER SUBSECTION (C) OF THIS SECTION WOULD INCREASE
THE ANNUAL RATE BY AT LEAST 0.5 PERCENT; AND
(2) THE RATE CHARGED SHALL BE REDUCED IF A
COMPUTATION MADE UNDER SUBSECTION (C) OF THIS SECTION WOULD
DECREASE THE ANNUAL RATE BY AT LEAST 0.5 PERCENT.
(G) THE LIFE INSURER SHALL:
(1) NOTIFY THE POLICYHOLDER WHEN A CASH LOAN IS MADE
OF THE BEGINNING ANNUAL RATE OF INTEREST ON THE LOAN;
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