This text of North Dakota § 26.1-33.4-12 (Prohibited practices) is published on Counsel Stack Legal Research, covering North Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
2. If the financing does not violate section 26.1-33.4-12 in this manner, the insurance
carrier:
a. May make disclosures, such as the following, to the applicant and the insured,
either on the application or an amendment to the application to be completed no
later than the delivery of the policy: "If you have entered a loan arrangement
where the policy is used as collateral, and the policy does change ownership at
some point in the future in satisfaction of the loan, the following may be true:
(1)A change of ownership could lead to a stranger owning an interest in the
insured's life;
(2)A change of ownership could in the future limit your ability to purchase future
insurance on the insured's life because there is a limit to how much
coverage insurers will issue on one life;
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2. If the financing does not violate section 26.1-33.4-12 in this manner, the insurance
carrier:
a. May make disclosures, such as the following, to the applicant and the insured,
either on the application or an amendment to the application to be completed no
later than the delivery of the policy: "If you have entered a loan arrangement
where the policy is used as collateral, and the policy does change ownership at
some point in the future in satisfaction of the loan, the following may be true:
(1) A change of ownership could lead to a stranger owning an interest in the
insured's life;
(2) A change of ownership could in the future limit your ability to purchase future
insurance on the insured's life because there is a limit to how much
coverage insurers will issue on one life;
(3) Should there be a change of ownership and you wish to obtain more
insurance coverage on the insured's life in the future, the insured's higher
issue age, a change in health status, and other factors may reduce the
ability to obtain coverage and may result in significantly higher premiums;
and
(4) You should consult a professional adviser, since a change in ownership in
satisfaction of the loan may result in tax consequences to the owner,
depending on the structure of the loan;" and
b. May require certifications, such as the following, from the applicant or the insured
or both:
I have not entered into any agreement or arrangement providing for the
future sale of this life insurance policy;
My loan arrangement for this policy provides funds sufficient to pay for
some or all of the premiums, costs, and expenses associated with obtaining
and maintaining my life insurance policy, but I have not entered into any
agreement by which I am to receive consideration in exchange for procuring
this policy; and
The borrower has an insurable interest in the insured.