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
Those states requiring insurers to obtain prior approval rating of rates and policy forms before they use them. Although most states once fell into this category, many followed the lead of ...
Conversion of form of ownership from a mutual insurance company to a stock insurance company. Interest in demutualization of life insurance companies surged in the early 1980s among many ...
Gain that occurs when the move in the underlying asset in one direction is similar to the loss when the underlying asset moves in the opposite direction. For example, if a stock goes up by ...
Fund that comes into existence because premiums for ordinary life insurance policies in their early years are higher than necessary for the pure cost of protection. These excess premiums, ...
Organization of inland marine insurance underwriters. ...
Major credit insurer of the early 20th century that merged into the London Guarantee and Accident Co. in 1931. ...
Base upon which a mortality table is built by beginning with a randomly selected group of people who are alive at the earliest age for which statistics are available on the number of people ...
Provision in an umbrella liability insurance policy under which the policy will pay those losses that come within the retention limits of the primary policy, but the primary policy cannot ...
Distribution of assets if a pension plan is terminated. The allocation is made by either: refunding all of an employee's contributions, plus interest; establishment of classes of employees ...
Have a question or comment?
We're here to help.