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Session Laws, 1983
Volume 745, Page 2371   View pdf image
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HARRY HUGHES, Governor                                               2371 (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; (2)  NOTIFY THE POLICYHOLDER WITH RESPECT TO PREMIUM
LOANS OF THE BEGINNING ANNUAL RATE OF INTEREST ON THE LOAN AS
SOON AS IS REASONABLY PRACTICAL AFTER MAKING THE INITIAL LOAN; (3)  GIVE REASONABLE ADVANCE NOTICE TO POLICYHOLDERS
WITH OUTSTANDING LOANS OF ANY INCREASE IN THE RATE; AND (4)   INCLUDE IN THE NOTICES REQUIRED UNDER THIS
SUBSECTION THE SUBSTANCE OF THE RELEVANT PROVISIONS OF
SUBSECTIONS (B) AND (D) OF THIS SECTION. (H) THE LOAN VALUE OF THE POLICY SHALL BE DETERMINED IN
ACCORDANCE WITH § 408A OR § 414 OF THIS ARTICLE BUT A POLICY MAY
NOT TERMINATE IN A POLICY YEAR AS THE SOLE RESULT OF CHANGE IN
THE INTEREST RATE DURING THAT POLICY YEAR, AND THE LIFE INSURER
SHALL MAINTAIN COVERAGE DURING THAT POLICY YEAR UNTIL THE TIME IT
WOULD OTHERWISE HAVE TERMINATED IF THERE HAD BEEN NO CHANGE
DURING THAT POLICY YEAR. (I) THE SUBSTANCE OF THIS PERTINENT PROVISIONS OF
SUBSECTIONS (B) AND (D) OF THIS SECTION SHALL BE SET FORTH IN THE
POLICIES TO WHICH THEY APPLY. (J) FOR PURPOSES OF THIS SECTION: (1) THE RATE OF INTEREST ON POLICY LOANS PERMITTED
UNDER THIS SECTION INCLUDES THE INTEREST RATE CHARGE ON
REINSTATEMENT OF POLICY LOANS FOR THE PERIOD DURING AND AFTER ANY
LAPSE OF A POLICY.


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Session Laws, 1983
Volume 745, Page 2371   View pdf image
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