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, provided that the policy is surrendered. The amendment includes provisions that ensure the policy's death benefit remains active until payment is made and outlines the conditions under which interest will accrue on the cash surrender value.

Additionally, if the payment is not made within 45 days of the surrender request, the insurer is 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 deferral period. This change aims to provide clearer guidelines for both insurers and policyholders regarding the handling of cash surrender values and the associated interest payments.

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