L&HPennsylvaniamedium
Under PA life insurance law, who establishes the maximum interest rate that a PA life insurer may charge on a policy loan against cash value?
AThe policyowner at the time the loan is taken
The Pennsylvania Insurance Commissioner, by regulation
CThe insurer with no statutory cap
DThe federal Treasury, based on the IRS applicable federal rate
Why this is the answer
PA statute and regulation place authority over the maximum policy loan interest rate with the Insurance Commissioner. Policies typically allow either a fixed rate stated in the contract or an adjustable rate tied to Moody's corporate bond yield, subject to the Commissioner's cap.
Studying for the Pennsylvania Life & Health exam?
This question comes from our L&H bank. Take a free practice test — no signup.