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 such payments for up to six months after a policyholder requests a surrender, provided that the policy is surrendered according to its terms. During this deferral period, the policy's death benefit will remain active.

Additionally, if the insurer does not make the payment within 45 days of the surrender request, they are required to pay interest on the cash surrender value at a specified rate, starting from the date of surrender until the full amount is paid within the six-month timeframe. This amendment aims to clarify the conditions under which cash surrender values are handled and ensure that policyholders receive fair treatment regarding interest payments during deferral periods.

Statutes affected:
Old version SB519 V2 - 4-10-2025 01:53 PM: 23-81-203(c)
Old version SB519 Original - 3-19-2025 01:49 PM: 23-81-203(c)
SB 519: 23-81-203(c)
Act 958: 23-81-203(c)