(A) An insurer doing business in this State may not make a loan to any of its directors or officers, either directly or indirectly, except as provided in this section, and its director or officer may not accept any loan, directly or indirectly. The insurer may not make an advance to any of its directors or officers for future services to be performed beyond a period of one year from the date of making the advance. This section does not prohibit a life insurer from making a policy loan upon its policy or contract in an amount not exceeding the net reserve or cash value of the policy or contract.
(B) This section does not prohibit an insurer in connection with the relocation of the place of employment of an officer, including any relocation in connection with the initial employment of the officer, from making, or the officer from accepting, a mortgage loan to the officer on real property owned by the officer which is to serve as his residence or acquiring, or the officer from selling to it, at not more than the fair market value, the residence of the officer. Mortgage loans made or residences acquired under this section are subject to the limitations imposed on investments by Chapter 12 of this title. In addition, this section does not prohibit an insurer from making a loan to its directors or officers if the loan is first approved in writing by the director or his designee.
(C) An officer or director of an insurer who violates this section by participating in making the loan or accepting a loan except as authorized in this section, is guilty of a misdemeanor and, upon conviction, must be fined in the discretion of the court or imprisoned not more than three years, or both.
(D) A loan made by an insurer to its officers, directors, or employees bears the same rate of interest as is available to the public on loans from the insurer.
HISTORY: Former 1976 Code Section 38-55-80 [1947 (45) 322; 1952 Code Section 37-1202; 1962 Code Section 37-1208; 1964 (53) 2293] recodified as Section 38-57-80 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-9-140 [1956 (49) 2028; 1962 Code Section 37-149.3; 1980 Act No. 477] recodified as Section 38-55-80 by 1987 Act No. 155, Section 1; 1988 Act No. 374, Section 27; 1993 Act No. 184, Section 217; 1993 Act No. 181, Section 706; 2012 Act No. 137, Section 7, eff April 2, 2012.