Borrowing by certificate holders under group life policy
(1) An insurer of a group life insurance policy may authorize certificate holders under the policy to borrow upon the policy, subject to the following provisions:
(a) The insurer may require a certificate holder, in order to borrow on the policy, to have been a certificate holder under the policy for a minimum period specified by the insurer.
(b) The insurer may require that no premium on the policy be in default beyond the grace period for payment.
(2) An insurer authorizing a certificate holder under a group life insurance policy may establish a minimum loan amount, but the amount may not exceed $1,000.
(3) An insurer may charge a fixed interest rate not exceeding eight percent per year, or an adjustable interest rate. The policy provision establishing an adjustable interest rate must comply with ORS 743.187 (Maximum interest rate on policy loan). The exemption from a limitation on interest rates under state law established in ORS 743.187 (Maximum interest rate on policy loan) for individual life insurance policies also applies to interest rates established pursuant to this section.
(4) The loan value of a certificate shall be equal to 90 percent of the cash surrender value of the certificate at the time of the loan, less any existing indebtedness not already deducted, including any unpaid interest. This subsection does not apply to certificates issued under a group policy for which the loan value is established by federal law. [1991 c.182 §9]
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