Mississippi House Bill HB1381

Mississippi 2022 Regular Session

• Introduced: 1/17/22
• Refer: 1/17/22
• Failed: 2/1/22

Caption

Life insurance policy; require policy loans to have a fixed rate.

Impact

The implementation of HB 1381 will directly affect life insurance regulations in Mississippi, particularly the conditions surrounding policy loans. By limiting the interest rate options to fixed rates and requiring clear disclosures in bold print, the bill is designed to protect consumers from potential financial pitfalls associated with fluctuating interest rates. This change is anticipated to streamline the current insurance practices and improve confidence among policyholders regarding the costs associated with their policy loans.

Summary

House Bill 1381 seeks to amend Section 83-7-26 of the Mississippi Code of 1972 to require life insurance policies to offer policy loans at a fixed interest rate only. The bill stipulates that any maximum interest rate for policy loans shall not exceed eight percent (8%) per annum or must be a fixed rate as specified within the policy document. This legislative proposal is aimed at enhancing transparency and uniformity in the terms under which policy loans are made available to policyholders, ensuring that individuals can make informed decisions regarding their life insurance products.

Contention

Debate surrounding HB 1381 may stem from concerns over its impact on insurance companies and their ability to offer competitive products. Opponents may argue that restricting policy loans to fixed rates could reduce flexibility for insurers to adjust to market conditions, potentially leading to higher costs for consumers in the long term. Further contention could arise around the operational implications for insurance providers in updating their policies and ensuring compliance with the new regulatory framework outlined by this bill.