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
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
History: 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