Tex. Ins. Code Section 1110.004
Maximum Interest Rate on Policy Loans

(a)

In this section, “published monthly average” means:

(1)

Moody’s Corporate Bond Yield Average--Monthly Average Corporates as published by Moody’s Investors Service, Inc., or a successor to that corporation; or

(2)

if the rate described by Subdivision (1) is no longer published, a substantially similar average established by rule of the commissioner.

(b)

A life insurance policy must include a provision for an interest rate on a policy loan that:

(1)

does not exceed 10 percent a year; or

(2)

is an adjustable maximum interest rate established from time to time by the life insurer as permitted by law and does not exceed the lesser of:

(A)

15 percent a year; or

(B)

the greater of:
(i)
the published monthly average for the calendar month that ended two months before the date on which the rate is determined; or
(ii)
the rate used to compute the cash surrender values under the life insurance policy during the applicable period plus one percent per year.

(c)

This section also applies to the interest rate charged, on reinstatement of a policy loan, for the period during and after a lapse of the life insurance policy.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1, 2003.

Source: Section 1110.004 — Maximum Interest Rate on Policy Loans, https://statutes.­capitol.­texas.­gov/Docs/IN/htm/IN.­1110.­htm#1110.­004 (accessed May 26, 2025).

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