Page:United States Statutes at Large Volume 62 Part 1.djvu/60

 30 PUBLIC LAWS-CH. 66 -FEB. 19, 1948 [62 STAT. the Superintendent a plan providing for such equitable increases, if any, in the cash surrender values and nonforfeiture benefits in such policies as the Superintendent shall approve." 48.Satcd l 35703 SEO. 2. That provisions (6), (7), and (8) of section 3 of chapter (6), (7), (8). V of said Act, be amended to read as follows: Lo ans . "(6) A provision that after the policy has been in force three full years the company at any time, while the policy is in force, will advance, on proper assignment or pledge of the policy and on the sole security thereof, at a specified rate of interest, a sum equal to, or at the option of the insured less than the amount required by Post, p. 34. section 5c of this chapter under the conditions specified thereby; Indebtedness. and that the company will deduct from such loan value any indebted- ness not already deducted in determining such value and any unpaid balance of the premium for the current policy year, and may collect interest in advance on the loan to the end of the current policy year. Nonapplicability. This provision shall not be required in term insurance, nor shall it apply to temporary insurance or pure endowment insurance, issued Interest. or granted in exchange for lapsed or surrendered policies. The policy may further provide that if the interest on the loan is not paid when due it shall be added to the existing loan and shall bear interest at the same rate. "(7) A provision for nonforfeiture benefits and cash surrender Infra. values in accordance with the requirements of section 5a or section Pot, p. 31. 5b of this chapter. "(8) A provision specifying the options, if any, to which the policy- holder is entitled in the event of default in a premium payment." D8Scat.cCode-704 SE. 3 . That provision (3) of section 4 of chapter V of said Act, be (3). amended to read as follows: turity tlessthan face " (3) Except for provisions relating to misstatement of age, suicide, value. aviation, and military or naval service in time of war, a provision for any mode of settlement at maturity, after the expiration of the contestable period of the policy, of less value than the amount insured on the face of the policy plus dividend additions, if any, less any indebtedness to the company on or secured by the policy, and less any Noppicabit premium that may, by the terms of the policy, be deducted. This paragraph shall not apply to any nonforfeiture provision." SEC. 4 . That said Act is amended by inserting after section 5 of D.C. Code 365-706. chapter V thereof the following three new sections: "SEC. 5a. NONFORFErrrBE BENEFITS AND CASH SURRENDER VALUES.- This section shall apply only to policies of life insurance issued prior to the operative date of section 5b (the standard nonforfeiture law) of this chapter. Default in premium "The nonforfeiture benefits referred to in provision (7) of section 3 of this chapter shall be available to the insured in event of default in premium payments, after premiums shall have been paid for three years, and shall be a stipulated form of insurance, effective from the due date of the defaulted premium, the net value of which shall be at least equal to the reserve at the date of default on the policy and on dividend additions thereto, if any, exclusive of the reserve on account of return premium insurance and on total and permanent disability and additional accidental death benefits (the policy to specify the mortality table and rate of interest adopted for computing such reserve), less a specified percentage (not more than two and one-half) of the amount insured by the policy and of existing dividend additions thereto, if any, and less any existing indebtedness to the company on Deductions. or secured by the policy: Provided, That a company may, in lieu of the provision herein permitted for the deduction from the reserve of a sum not more than 21/2 per centum of the amount insured by the policy, and of any dividend additions thereto, insert in the policy a

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