Naic: Model Policy Loan Interest Rate Bill National Association Of Insurance Commissioners
Definition of "Naic: model policy loan interest rate bill national association of insurance commissioners"
Bill that allows the insurance company to include a clause in its policy that permits the policyholder to make a policy loan at a variable interest rate on new policies. Under this clause, the following must be instituted by the insurance company: interest rate cannot be changed more than four times each year; at least once each year, an evaluation must be made of the requirement for any change in the interest rate; interest rate cannot be changed to that of a rate higher than Moody's Composite Yield on seasoned corporate bonds, which is in effect two months prior to the establishment of the new rate or to a rate higher than the interest rate being credited to the cash value plus 1%. The rate change calculation that is utilized is the decision of the insurance company. No change in the interest rate can be made unless the adjustment is for an increase of at least one-half of 1 %. Should the interest rate charged on policy loans currently decrease to an amount at least equal to one-half of 1% of that rate currently being charged, then the variable loan rate must be lowered in turn. There remains no requirement for the insurance company to actually increase the interest rate or to use a variable interest rate; the sole use of fixed interest rates is still permissible.
Popular Insurance Terms
Coverage issued to a creditor on the lives of debtors for outstanding loans. If a debtor dies before repayment, the policy pays the remainder of the loan to the creditor. The contract ...
Imprecise term still occasionally used by commercial or proprietary insurers to differentiate them from fraternal insurers. "Old line" was apparently meant to make these companies sound ...
Policy clause that excludes coverage for loss of property if the cause of the loss cannot be identified. Mysterious disappearance is an exclusion in a standard inland marine insurance ...
A contract sold by insurance companies that is bought by means of a single lump sum payment usually providing a monthly income payment for the annuitant's life. The amount of the monthly ...
One named under provisions of the employee retirement income security act of 1974 (erisa) for a terminated pension plan with an unfunded liability for its benefits. ...
Elements within a group under study that have the same characteristic (s), have the same expectation of loss, are very much alike with respect to the variable under consideration, and do ...
Fund that concentrates primarily on short-term government securities, certificates of deposit with maturities less than one year, and high-quality interest-bearing corporate debt. The fund ...
Insurance policy that pays a face amount/ lump sum if the insured is diagnosed with a specified critical illness. This sum is paid directly to the insured regardless of any other sources of ...
Risk distribution included by type of coverage, by kind of risk, and by geographical location. ...
Have a question or comment?
We're here to help.