A. Each individual life insurance policy shall contain a provision that afterthe policy has been in force three policy years the insurer shall at anytime, while the policy is in force other than as extended term insurance,advance, on proper assignment or pledge of the policy and on the solesecurity of the policy, a sum equal to or, at the option of the policyowner,less than the amount required by § 38.2-3218, under the conditions specifiedby that section.
B. Each individual life insurance policy issued after July 1, 1975, and priorto July 1, 1981, shall contain only one of the following policy loan interestrate provisions:
1. A provision that a policy loan shall bear interest at a specified rate notexceeding eight percent per year; or
2. A provision that all loans under the policy, including outstanding loans,shall bear interest at a variable rate not exceeding eight percent per year,specified from time to time by the insurer. The effective date of anyincrease in the variable rate shall be not less than one year after theeffective date of the establishment of the previous rate. If the interestrate is increased, the amount of the increase shall not exceed one percentper year. The variable rate may be decreased without restriction as to amountor frequency. With respect to policies providing for a variable rate, theinsurer shall give notice of:
a. The variable rate currently effective when a loan is made and whennotification of interest due is furnished;
b. Any increase in the variable rate at least thirty days before theeffective date for any loans outstanding forty days before that date; and
c. The increase at the time a loan is made for any loans made during theforty days before the effective date of the increase. The notice shall begiven as directed by the policyowner and any assignee as shown on the recordsof the insurer at its home office.
C. 1. Each individual life insurance policy issued after July 1, 1981, shallcontain a policy loan interest rate provision permitting either:
a. A maximum fixed interest rate of not more than eight percent per year; or
b. An adjustable maximum interest rate established from time to time by theinsurer as permitted by law.
2. The interest rate charged on a policy loan made under subdivision 1 b ofthis subsection shall not exceed the greater of:
a. The Published Monthly Average for the calendar month ending two monthsbefore the date on which the rate is determined; or
b. The rate used to compute the cash surrender values under the policy duringthe applicable period plus one percent per year.
3. For the purposes of this subsection, the "Published Monthly Average"means:
a. Moody's Corporate Bond Yield Average - Monthly Average Corporates aspublished by Moody's Investors Service, Inc., or any successor thereto; or
b. If the Moody's Corporate Bond Yield Average - Monthly Average Corporatesis no longer published, a substantially similar average, established byregulation issued by the Commission.
4. If the maximum interest rate is determined pursuant to subdivision 1 b ofthis subsection, the policy shall contain a provision setting forth thefrequency at which the rate is to be determined for that policy.
5. The maximum interest rate for each policy shall be determined at regularintervals at least once every twelve months, but not more frequently thanonce every three months. At the intervals specified in the policy:
a. The rate being charged may be increased whenever the increase asdetermined under subdivision 2 of this subsection would increase that rate byone-half percent or more per year;
b. The rate being charged shall be reduced whenever the reduction asdetermined under subdivision 2 of this subsection would decrease that rate byone-half percent or more per year.
6. The insurer shall:
a. Notify the policyowner at the time a cash loan is made of the initialinterest rate;
b. Notify the policyowner of the initial interest rates on a premium loan assoon as it is reasonably practical to do so after making the loan. Noticeneed not be given to the policyowner when a further premium loan is added,except as provided in subdivision 6 c below;
c. Send reasonable advance notice of any increase in the rates topolicyowners with loans; and
d. Include the substance of the pertinent provisions of subdivisions 1 and 4of this subsection in the notices required above.
7. No policy shall terminate in a policy year as the sole result of a changein the interest rate during that policy year, and the insurer shall maintaincoverage during that policy year until the time at which it would otherwisehave terminated if there had been no change during that policy year.
8. The substance of the pertinent provisions of subdivisions 1 and 4 of thissubsection shall be set forth in the policies to which they apply.
9. For the purposes of this section:
a. The interest rate on policy loans permitted under this section includesthe interest rate charged on reinstatement of policy loans for the periodduring and after any lapse of a policy.
b. The term "policy loan" includes any premium loan made under a policy topay one or more premiums that were not paid to the insurer as they fell due.
c. The term "policy" includes certificates issued by a fraternal benefitsociety and annuity contracts that provide for policy loans.
10. No other provision of law, including Chapter 7.3 (§ 6.1-330.49 et seq.)of Title 6.1, shall apply to policy loan interest rates unless madespecifically applicable to the rates.
D. The insurer may deduct from the loan value any indebtedness not alreadydeducted in determining the value of any unpaid balance of the premium forthe current policy year and any interest that may be allowable on the loan tothe end of the current policy year. The policy may further provide that ifthe interest on the loan is not paid when due, it shall be added to theexisting loan and shall bear interest at the same rate.
E. A policy loan provision shall not be required in term insurance policies.
A. Each individual life insurance policy shall contain a provision that afterthe policy has been in force three policy years the insurer shall at anytime, while the policy is in force other than as extended term insurance,advance, on proper assignment or pledge of the policy and on the solesecurity of the policy, a sum equal to or, at the option of the policyowner,less than the amount required by § 38.2-3218, under the conditions specifiedby that section.
B. Each individual life insurance policy issued after July 1, 1975, and priorto July 1, 1981, shall contain only one of the following policy loan interestrate provisions:
1. A provision that a policy loan shall bear interest at a specified rate notexceeding eight percent per year; or
2. A provision that all loans under the policy, including outstanding loans,shall bear interest at a variable rate not exceeding eight percent per year,specified from time to time by the insurer. The effective date of anyincrease in the variable rate shall be not less than one year after theeffective date of the establishment of the previous rate. If the interestrate is increased, the amount of the increase shall not exceed one percentper year. The variable rate may be decreased without restriction as to amountor frequency. With respect to policies providing for a variable rate, theinsurer shall give notice of:
a. The variable rate currently effective when a loan is made and whennotification of interest due is furnished;
b. Any increase in the variable rate at least thirty days before theeffective date for any loans outstanding forty days before that date; and
c. The increase at the time a loan is made for any loans made during theforty days before the effective date of the increase. The notice shall begiven as directed by the policyowner and any assignee as shown on the recordsof the insurer at its home office.
C. 1. Each individual life insurance policy issued after July 1, 1981, shallcontain a policy loan interest rate provision permitting either:
a. A maximum fixed interest rate of not more than eight percent per year; or
b. An adjustable maximum interest rate established from time to time by theinsurer as permitted by law.
2. The interest rate charged on a policy loan made under subdivision 1 b ofthis subsection shall not exceed the greater of:
a. The Published Monthly Average for the calendar month ending two monthsbefore the date on which the rate is determined; or
b. The rate used to compute the cash surrender values under the policy duringthe applicable period plus one percent per year.
3. For the purposes of this subsection, the "Published Monthly Average"means:
a. Moody's Corporate Bond Yield Average - Monthly Average Corporates aspublished by Moody's Investors Service, Inc., or any successor thereto; or
b. If the Moody's Corporate Bond Yield Average - Monthly Average Corporatesis no longer published, a substantially similar average, established byregulation issued by the Commission.
4. If the maximum interest rate is determined pursuant to subdivision 1 b ofthis subsection, the policy shall contain a provision setting forth thefrequency at which the rate is to be determined for that policy.
5. The maximum interest rate for each policy shall be determined at regularintervals at least once every twelve months, but not more frequently thanonce every three months. At the intervals specified in the policy:
a. The rate being charged may be increased whenever the increase asdetermined under subdivision 2 of this subsection would increase that rate byone-half percent or more per year;
b. The rate being charged shall be reduced whenever the reduction asdetermined under subdivision 2 of this subsection would decrease that rate byone-half percent or more per year.
6. The insurer shall:
a. Notify the policyowner at the time a cash loan is made of the initialinterest rate;
b. Notify the policyowner of the initial interest rates on a premium loan assoon as it is reasonably practical to do so after making the loan. Noticeneed not be given to the policyowner when a further premium loan is added,except as provided in subdivision 6 c below;
c. Send reasonable advance notice of any increase in the rates topolicyowners with loans; and
d. Include the substance of the pertinent provisions of subdivisions 1 and 4of this subsection in the notices required above.
7. No policy shall terminate in a policy year as the sole result of a changein the interest rate during that policy year, and the insurer shall maintaincoverage during that policy year until the time at which it would otherwisehave terminated if there had been no change during that policy year.
8. The substance of the pertinent provisions of subdivisions 1 and 4 of thissubsection shall be set forth in the policies to which they apply.
9. For the purposes of this section:
a. The interest rate on policy loans permitted under this section includesthe interest rate charged on reinstatement of policy loans for the periodduring and after any lapse of a policy.
b. The term "policy loan" includes any premium loan made under a policy topay one or more premiums that were not paid to the insurer as they fell due.
c. The term "policy" includes certificates issued by a fraternal benefitsociety and annuity contracts that provide for policy loans.
10. No other provision of law, including Chapter 7.3 (§ 6.1-330.49 et seq.)of Title 6.1, shall apply to policy loan interest rates unless madespecifically applicable to the rates.
D. The insurer may deduct from the loan value any indebtedness not alreadydeducted in determining the value of any unpaid balance of the premium forthe current policy year and any interest that may be allowable on the loan tothe end of the current policy year. The policy may further provide that ifthe interest on the loan is not paid when due, it shall be added to theexisting loan and shall bear interest at the same rate.
E. A policy loan provision shall not be required in term insurance policies.
A. Each individual life insurance policy shall contain a provision that afterthe policy has been in force three policy years the insurer shall at anytime, while the policy is in force other than as extended term insurance,advance, on proper assignment or pledge of the policy and on the solesecurity of the policy, a sum equal to or, at the option of the policyowner,less than the amount required by § 38.2-3218, under the conditions specifiedby that section.
B. Each individual life insurance policy issued after July 1, 1975, and priorto July 1, 1981, shall contain only one of the following policy loan interestrate provisions:
1. A provision that a policy loan shall bear interest at a specified rate notexceeding eight percent per year; or
2. A provision that all loans under the policy, including outstanding loans,shall bear interest at a variable rate not exceeding eight percent per year,specified from time to time by the insurer. The effective date of anyincrease in the variable rate shall be not less than one year after theeffective date of the establishment of the previous rate. If the interestrate is increased, the amount of the increase shall not exceed one percentper year. The variable rate may be decreased without restriction as to amountor frequency. With respect to policies providing for a variable rate, theinsurer shall give notice of:
a. The variable rate currently effective when a loan is made and whennotification of interest due is furnished;
b. Any increase in the variable rate at least thirty days before theeffective date for any loans outstanding forty days before that date; and
c. The increase at the time a loan is made for any loans made during theforty days before the effective date of the increase. The notice shall begiven as directed by the policyowner and any assignee as shown on the recordsof the insurer at its home office.
C. 1. Each individual life insurance policy issued after July 1, 1981, shallcontain a policy loan interest rate provision permitting either:
a. A maximum fixed interest rate of not more than eight percent per year; or
b. An adjustable maximum interest rate established from time to time by theinsurer as permitted by law.
2. The interest rate charged on a policy loan made under subdivision 1 b ofthis subsection shall not exceed the greater of:
a. The Published Monthly Average for the calendar month ending two monthsbefore the date on which the rate is determined; or
b. The rate used to compute the cash surrender values under the policy duringthe applicable period plus one percent per year.
3. For the purposes of this subsection, the "Published Monthly Average"means:
a. Moody's Corporate Bond Yield Average - Monthly Average Corporates aspublished by Moody's Investors Service, Inc., or any successor thereto; or
b. If the Moody's Corporate Bond Yield Average - Monthly Average Corporatesis no longer published, a substantially similar average, established byregulation issued by the Commission.
4. If the maximum interest rate is determined pursuant to subdivision 1 b ofthis subsection, the policy shall contain a provision setting forth thefrequency at which the rate is to be determined for that policy.
5. The maximum interest rate for each policy shall be determined at regularintervals at least once every twelve months, but not more frequently thanonce every three months. At the intervals specified in the policy:
a. The rate being charged may be increased whenever the increase asdetermined under subdivision 2 of this subsection would increase that rate byone-half percent or more per year;
b. The rate being charged shall be reduced whenever the reduction asdetermined under subdivision 2 of this subsection would decrease that rate byone-half percent or more per year.
6. The insurer shall:
a. Notify the policyowner at the time a cash loan is made of the initialinterest rate;
b. Notify the policyowner of the initial interest rates on a premium loan assoon as it is reasonably practical to do so after making the loan. Noticeneed not be given to the policyowner when a further premium loan is added,except as provided in subdivision 6 c below;
c. Send reasonable advance notice of any increase in the rates topolicyowners with loans; and
d. Include the substance of the pertinent provisions of subdivisions 1 and 4of this subsection in the notices required above.
7. No policy shall terminate in a policy year as the sole result of a changein the interest rate during that policy year, and the insurer shall maintaincoverage during that policy year until the time at which it would otherwisehave terminated if there had been no change during that policy year.
8. The substance of the pertinent provisions of subdivisions 1 and 4 of thissubsection shall be set forth in the policies to which they apply.
9. For the purposes of this section:
a. The interest rate on policy loans permitted under this section includesthe interest rate charged on reinstatement of policy loans for the periodduring and after any lapse of a policy.
b. The term "policy loan" includes any premium loan made under a policy topay one or more premiums that were not paid to the insurer as they fell due.
c. The term "policy" includes certificates issued by a fraternal benefitsociety and annuity contracts that provide for policy loans.
10. No other provision of law, including Chapter 7.3 (§ 6.1-330.49 et seq.)of Title 6.1, shall apply to policy loan interest rates unless madespecifically applicable to the rates.
D. The insurer may deduct from the loan value any indebtedness not alreadydeducted in determining the value of any unpaid balance of the premium forthe current policy year and any interest that may be allowable on the loan tothe end of the current policy year. The policy may further provide that ifthe interest on the loan is not paid when due, it shall be added to theexisting loan and shall bear interest at the same rate.
E. A policy loan provision shall not be required in term insurance policies.
