(a) Policies issued on or after the effective date of this article shall provide for policy loan interest rates at either of the following rates:
- (1) A provision permitting a maximum interest rate of not more than 8 percent per annum.
- (2) A provision permitting an adjustable maximum interest rate established from time to time by the life insurer as permitted by law.
(b) The rate of interest charged on a policy loan made under paragraph (2) of subdivision (a) shall not exceed the higher of the following:
- (1) The published monthly average for the calendar month ending two months before the date on which the rate is determined.
- (2) The rate used to compute the cash surrender values under the policy during the applicable period plus 1 percent per annum.
- (c) Any insurer offering insurance policies with an adjustable policy loan interest rate shall establish a written pricing or dividend policy in order that the holders of the policies shall receive a benefit from any earnings of the insurer resulting from the use of the adjustable rate, either by means of higher dividends or lower premiums or a combination of both.