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Searching 2021-2022 Session

The Vermont Statutes Online

 

Title 8 : Banking and Insurance

Chapter 101 : INSURANCE COMPANIES GENERALLY

Subchapter 012 : Actions and Penalties

(Cite as: 8 V.S.A. § 3665b)
  • § 3665b. Timely payment of life insurance claims and annuity death benefits; interest

    (a) This section applies to policies of life insurance and contracts of annuity. As used in this section, a "beneficiary" means any person making a claim against a policy of life insurance or for death benefits provided under a contract of annuity.

    (b) A claim for payment of benefits under a policy of life insurance shall be paid within 30 days after the date that a properly executed proof of loss is received by the insurer. All payments of claims under policies of life insurance shall include interest accrued from the date of death of the insured to the date of payment. The interest rate shall be the rate paid on proceeds left on deposit or six percent, whichever is greater.

    (c) A claim for payment of benefits under a contract of annuity shall be paid within 30 days after the date that a properly executed proof of loss is received by the insurer. Payments of claims for death benefit proceeds under contracts of annuity shall include interest at the rate paid for proceeds left on deposit or six percent, whichever is greater. Interest shall accrue and be payable as follows:

    (1) For variable annuity contracts subject to the Securities and Exchange Commission's rules governing the liquidation of account values at the death of the beneficiary, from the eighth day following the date that a properly executed proof of loss is received by the insurer.

    (2) For all other contracts of annuity, from the date of death of the measuring life, unless the contract specifies that the contract remains in force until the date that a properly executed proof of loss is received by the insurer. For purposes of this section, the individual whose death triggers the death benefit proceeds is the measuring life.

    (d) If a claim is contested, it shall be paid within 30 days after the entry of a final nonappealable judgment against the insurer; the entry of a binding arbitration decision between the insurer, the beneficiary, and the Department, as applicable; or the execution of a settlement agreement between the insurer, the beneficiary, and the Department, as applicable.

    (e) If an insurer fails to pay a claim within the applicable time period set forth in subsection (b), (c), or (d) of this section, it shall thereafter pay interest on the amount of the claim at the judgment rate allowed by law. Interest shall accrue from 30 days after the date the insurer receives a properly executed proof of loss. (Added 2019, No. 103 (Adj. Sess.), § 16.)