Bill Text: CA SB915 | 2017-2018 | Regular Session | Introduced

California Senate Bill 915 (Prior Session Legislation)

Introduced

Bill Title: Life insurance: policy loans.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2018-02-01 - Referred to Com. on RLS. [SB915 Detail]

Download: California-2017-SB915-Introduced.html

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill

No. 915

Introduced by Senator Gaines

January 22, 2018

An act to amend Section 1232 of the Insurance Code, relating to life insurance.

LEGISLATIVE COUNSEL'S DIGEST

SB 915, as introduced, Gaines. Life insurance: policy loans.

Existing law provides for the regulation of life insurance policy loans and provides for a maximum interest rate, as specified.

This bill would make technical, nonsubstantive changes to those provisions.

Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Section 1232 of the Insurance Code is amended to read:

1232.

(a) Policies issued on or after the effective date of this article shall provide for policy loan interest rates at either of the following rates:

(1) A provision permitting a maximum interest rate of not more than 8 percent per annum.

(2) A provision permitting an adjustable maximum interest rate established from time to time by the life insurer as permitted by law.

(b) The rate of interest charged on a policy loan made under paragraph (2) of subdivision (a) shall not exceed the higher of the following:

(1) The published monthly average for the calendar month ending two months before the date on which the rate is determined.

(2) The rate used to compute the cash surrender values under the policy during the applicable period plus 1 percent per annum.

(c) ~~Any~~ An insurer offering insurance policies with an adjustable policy loan interest rate shall establish a written pricing or dividend policy in order that the holders of the policies shall receive a benefit from any earnings of the insurer resulting from the use of the adjustable rate, either by means of higher ~~dividends~~ dividends, or lower ~~premiums~~ premiums, or a combination of both.