State RegulationsTX specificDifficulty 1/5
Under TIC 1101.009, how long may a Texas insurer defer making a policy loan after the policyowner applies for it?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under TIC 1101.009, an insurer may defer a policy loan for up to six months from the date the owner applies. The deferral right protects the insurer from having to liquidate investments at an inopportune time, but it is a limited right: it runs from the application date and cannot be used indefinitely. Once the six months expire, the insurer must grant the loan if the other conditions of TIC 1101.009 are satisfied.
Why the other options are wrong
- A) The six-month deferral runs from the date of the loan application, not from the end of the policy year.
- B) The deferral is limited to six months from the application; TIC 1101.009 does not permit an open-ended deferral until a policy anniversary.
- C) TIC 1101.009 expressly allows a deferral of up to six months, so the insurer is not required to fund the loan immediately on application.
Memory hook
The insurer may stall a loan for six months, but the clock starts on the application.