§ 23-81-118 — Life insurance - Refund of certain premiums and payment of proceeds

(a) Upon the death of an insured, the proceeds payable to the beneficiary under any policy of individual life insurance, delivered or issued for delivery in this state after July 20, 1979, that is in force on a premium-paying basis on the date of death shall include premiums paid for any period beyond the end of the policy month in which death occurred unless the refund of premiums is due some other person pursuant to contract provisions. (b) (1) When proceeds of any individual policy of life insurance, delivered or issued for delivery in this state, or refunds of premiums on any individual policy of life insurance delivered or issued for delivery in this state after July 20, 1979, are not paid within a reasonable period of time after proof of the death of the insured has been furnished to the insurer, the insurer shall pay interest upon the proceeds or refunds of premiums at the rate of eight percent (8%) per year. (2) For the purpose of this section, a reasonable period of time shall be that period of time sufficient to complete an investigation of the cause of death and to process the necessary claims. In no case shall this period exceed thirty (30) days from the date proof of death of the insured has been furnished to the insurer. (c) Unearned premiums shall be paid in a lump sum on a date no later than thirty (30) days after the proof of the insured's death has been furnished to the insurer. If not paid within thirty (30) days after proof of the insured's death has been furnished the insurer, interest upon any unpaid proceeds and any unearned premiums shall accrue interest from the date of the insured's death. (d) Nothing in this section shall be construed to require a refund of premiums on single premium policies.

Legislative History

Acts 1979, No. 312, §§ 1-4; A.S.A. 1947, §§ 66-3312.1 -- 66-3312.4; Acts 2001, No. 1382, § 2.