The bill amends the Standard Nonforfeiture Law for Life Insurance in Arkansas, specifically addressing the insurer's right to defer payment of cash surrender values. Effective January 1, 2026, insurers will have the authority to defer payment for up to six months after a policyholder requests a cash surrender value, provided that the policy is surrendered. The amendment stipulates that the policy's death benefit will remain in effect until the payment is made.

Additionally, if the payment is not completed within sixty days of the demand for surrender, the insurer is required to pay interest on the cash surrender value at a rate specified under Arkansas Code 23-81-118. This interest will accrue from the date of surrender until the cash surrender value is fully paid within the six-month deferral period. These changes aim to provide clearer regulations regarding the payment of interest on deferred cash surrender values in life insurance policies.

Statutes affected:
SB 519: 23-81-203(c)