LOANS ON POLICIES

Star (Christchurch), Volume XLIV, Issue 643, 22 December 1932, Page 4

LOANS ON POLICIES

Action Taken by Insurance Company. An important point is dealt with in the recent amendment of the National Expenditure Adjustment Act relating to loans on life assurance policies. It appears that it was the intention of the Government to place such loans on the same basis as mortgages of land, but that the Act did not clearly carry that intention into effect. Considerable doubt was thus left in the minds of life insurance offices as to the proper and equitable method of treating policyloan accounts, having regard to the interest of the great majority of policyholders who have not borrowed on their policies, as w-ell as those of the small minority who have done so. The amending Act,' however, has now clarified the position, and the manager of the A.M.P. Society states that, so far as that institution is concerned, it is intended to adjust all such loan accounts right back to April 1 last, whether application by the policyholder concerned is made, as required by the Act, or not. All accounts affected will be credited automatically with the rebate of interest without any application whatever on the part of the borrower.