A California whole-life policy lists a FIXED policy-loan interest rate. Under California Insurance Code § 10113.5, what is the MAXIMUM fixed loan interest rate permitted on such a policy?

Why this is the answer

California Insurance Code § 10113.5 sets an 8% per-annum cap on FIXED-rate policy loans. Alternatively, a policy may use an adjustable (variable) rate tied to a published index, in which case the 8% cap does not directly apply but the rate must be tied to an objective index per NAIC model standards adopted by CDI. 5% is below cap, 12% would be usurious for policy loans, and 'no cap' is plainly incorrect — California caps the rate to protect policyholders from being squeezed when they borrow against their own cash value.