2005 Minnesota Statutes

     61A.011 Interest on unpaid benefits. 

    Subdivision 1.    General requirement.  Notwithstanding 
 any other provision of law, when any insurer, including a 
 fraternal benefit society, admitted to transact life insurance 
 in this state pays the proceeds of or payments under any policy 
 of life insurance, individual or group, such insurer shall pay 
 interest at a rate not less than the then current rate of 
 interest on death proceeds left on deposit with the insurer, 
 computed from the insured's death until the date of payment, on 
 any such proceeds or payments payable to a beneficiary residing 
 in this state, or to a beneficiary under a policy issued in this 
 state, or to a beneficiary under a policy insuring a person 
 resident in this state at the time of death.  If the insurer has 
 no established current rate of interest for death proceeds left 
 on deposit with the insurer, then the rate of interest to be 
 paid under this subdivision shall be the rate of interest 
 charged by the insurer to policy holders for loans under the 
 insurer's policies. 

    Subd. 2.    Requirement for certain insurers.  
 Notwithstanding the provisions of subdivision 1, if an insurer 
 admitted to transact life insurance in this state does not pay 
 within 60 days after receipt of due proof of death of the 
 insured, the proceeds or payments under any policy of life 
 insurance, individual or group, such insurer shall pay interest 
 at an annual rate that is two percent more than the rate of 
 interest provided for in subdivision 1.  Such interest shall be 
 computed from the date of the insured's death until the date of 
 payment, on any such proceeds or payments payable to a 
 beneficiary residing in this state, or to a beneficiary under a 
 policy issued in this state or to a beneficiary under a policy 
 insuring a person resident in this state at the time of death. 
 Interest payments under this subdivision shall be in lieu of 
 interest payments required under subdivision 1. 

    Subd. 3.    Notice.  In any case in which interest on 
 the proceeds of, or payments under, any policy of life insurance 
 becomes payable pursuant to this section, the insurer shall 
 enclose with the payment a notice stating that interest is being 
 paid and specifying the rate of interest and the amount paid. 

    Subd. 4.    Payment not required.  This section shall 
 not require the payment of interest in any case in which:  (a) 
 the beneficiary or policy owner elects in writing delivered to 
 the insurer to receive the proceeds of, or payments under, the 
 policy by any means other than a lump sum payment thereof, 
 provided that the effective date of the policy settlement option 
 shall not be later than 60 days after the date of the insured's 
 death; (b) the terms of the policy insure an indebtedness owed 
 by the insured and the proceeds include postdeath interest on 
 the indebtedness; or (c) the beneficiary resides in a 
 jurisdiction which has a law requiring the payment of interest 
 to beneficiaries residing in that jurisdiction. 

    Nothing in this subdivision shall be construed to preclude 
 the payment of interest required under subdivisions 1 or 2 on 
 any proceeds remaining after extinguishment of the insured's 
 indebtedness. 

    Subd. 5.    Application.  This section shall apply only 
 to deaths of insureds which occur on or after August 1, 1977. 

    Subd. 6.    Definition.  For the purposes of this 
 section "to pay" means to issue a check for payment and "date of 
 payment" means the date on which the insurer issues a check to 
 transfer the amount in question to the beneficiaries or to 
 deposit that amount: 

    (a) with the district court of this state in accordance 
 with rule 67, Minnesota Rules of Civil Procedure for the 
 district courts; 

    (b) with the courts of any foreign jurisdiction as 
 authorized by the laws of that jurisdiction; or 

    (c) in a trust account in any bank or trust company 
 operating under the laws of this state or in any foreign bank, 
 provided that the insurer keeps records of the account and makes 
 these records open to inspection by the commissioner of commerce.

    Subd. 7.    Accidental death benefits.  Payments of 
 accidental death benefits under an individual or group policy, 
 whether payable in connection with a separate policy issued 
 solely to provide that type of coverage or otherwise, are 
 subject to this section.  If the applicable rate of interest 
 cannot be determined as provided in this section, the rate of 
 interest for purposes of subdivision 1 is the rate provided in 
 section 549.09, subdivision 1, paragraph (c). 

    Subd. 8. Repealed, 1993 c 13 art 1 s 17 

    HIST: 1977 c 353 s 1; 1983 c 289 s 114 subd 1; 1984 c 655 art 
 1 s 92; 1989 c 330 s 4; 1992 c 520 s 1; 1992 c 564 art 1 s 29