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
Methods for payment of the value of a policy. An insurance company can select one of three options in settlement of a loss: make a cash payment; take possession of damaged or destroyed ...
Smallest acceptable premium for which an insurance company will write a policy. This minimum charge is necessary to cover fixed expenses in placing the policy on the books. ...
U.S. government agency (formerly the Atomic Energy Commission) responsible for regulating the nuclear energy industry. The commission also provides supplemental insurance for nuclear ...
Same as term Convertible Term Life Insurance: coverage that can be converted into permanent insurance regardless of an insured's physical condition and without a medical examination. The ...
The term pro rata cancellation comes from the Latin term pro rata, which means in proportion or according to a certain rate. The term pro rata cancellation is used in the insurance business ...
Projections of future accidental losses based on analyses of historical loss patterns. A projected loss picture is used to determine the pure cost of protection and the resultant basic ...
Association of independent agents whose objective is to further the interests of these agents through education, lobbying, and professional ethics. ...
Relinquishment of rights in an insurance policy or pension plan. For example, by withdrawing contributions to a pension plan, an employee forfeits future retirement benefits under that plan. ...
Coverage for damage or destruction of property due to a crime, and property lost due to a burglary, whether successful or attempted. An endorsement provides coverage for robbery and theft ...
Have a question or comment?
We're here to help.