Bill > SB519

This bill amends the Arkansas Standard Nonforfeiture Law for Life Insurance, specifically addressing the conditions under which an insurance company can defer payment of a policy's cash surrender value. Starting January 1, 2026, insurers will have the right to defer cash surrender value payments for up to six months after a policyholder's demand, but with two key protections for the policyholder: first, the policy's death benefit will remain in force during this deferment period, and second, if the insurer does not pay the cash surrender value within 45 days of the demand, they must pay interest on the cash surrender value at a rate specified under § 23-81-118, with interest accruing from the date of surrender until the full payment is made within the six-month period. This amendment provides a clear framework for how and when an insurance company can delay cash surrender value payments while ensuring some financial protection for the policyholder through continued death benefit coverage and mandatory interest payments.

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https://arkleg.state.ar.us/Bills/Detail?id=sb519&ddBienniumSession=2025%2F2025R