2002 Legislation
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HOUSE BILL NO. 635 – Life insurance, payments

HOUSE BILL NO. 635

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Daily Data Tracking History



H0635...........................................................by BUSINESS
LIFE INSURANCE - Adds to existing law to provide that life insurers have
the power to hold the proceeds of a life insurance policy upon certain
terms and conditions; to provide for the payment of interest on death
benefits; and to provide the rate of interest.
                                                                        
02/12    House intro - 1st rdg - to printing
02/13    Rpt prt - to Bus

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  Second Regular Session - 2002
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 635
                                                                        
                                   BY BUSINESS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO LIFE INSURANCE; AMENDING CHAPTER 18, TITLE 41, IDAHO CODE, BY  THE
  3        ADDITION OF A NEW SECTION 41-1837, IDAHO CODE, TO PROVIDE THAT LIFE INSUR-
  4        ERS  HAVE  THE  POWER TO HOLD THE PROCEEDS OF A LIFE INSURANCE POLICY UPON
  5        CERTAIN TERMS AND CONDITIONS, TO PROVIDE FOR THE PAYMENT  OF  INTEREST  ON
  6        DEATH BENEFITS AND TO PROVIDE THE RATE OF INTEREST.
                                                                        
  7    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  8        SECTION  1.  That  Chapter  18,  Title 41, Idaho Code, be, and the same is
  9    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
 10    ignated as Section 41-1837, Idaho Code, and to read as follows:
                                                                        
 11        41-1837.  LIFE  INSURANCE POLICY SETTLEMENTS -- INTEREST. (1) Every policy
 12    of life insurance shall state that a life insurer shall have  the  power,  and
 13    the  life  insurer has the power,  to hold under agreement the proceeds of any
 14    policy of life insurance of any nature issued  by  it,  upon  such  terms  and
 15    restrictions as to revocation by the policyholder and control by beneficiaries
 16    and  with  such exemptions from the claims of creditors of beneficiaries other
 17    than the policyholder as set forth in the policy or as agreed to in writing by
 18    the insurer and the policyholder.  Upon maturity of a policy in the event  the
 19    policyholder  has  made no such agreement, the insurer shall have the power to
 20    hold the proceeds of the policy under an  agreement  with  the  beneficiaries.
 21    The insurer shall not be required to segregate funds.
 22        (2)  Every  policy of life insurance shall state that an insurer will, and
 23    the insurer shall, pay interest on death benefits payable under the terms of a
 24    life insurance policy insuring the life of any person who was  a  resident  of
 25    this  state  at  the  time of death. Such interest shall begin accruing on the
 26    date of death of the insurer or the date the loss becomes  effective,  at  the
 27    current  fixed interest rate of the insurer's fixed portfolio then paid by the
 28    insurer. Benefits payable that have  not  been  tendered  to  the  beneficiary
 29    within  ninety  (90) days of the receipt of proof of death shall accrue inter-
 30    est, commencing on the ninety-first  day of the receipt of proof of death,  at
 31    the aforementioned rate plus two percent (2%) per annum.

Statement of Purpose / Fiscal Impact


	                 STATEMENT OF PURPOSE
                            RS 12049

Under current law insurers have the power to delay payment of 
proceeds on life insurance policies. This proposal provides payment 
of interest on the benefits payable under the policy, accruing on 
the effective date of the loss, if paid within ninety days, at a 
fixed rate based on the insurer’s portfolio; and providing interest 
at that same rate plus two percent per annum if benefits are not 
paid within 90 days.


                             FISCAL IMPACT

There is no fiscal impact.






Contact
Name:	Rep. Wendy Jaquet
Phone:	332-1130




STATEMENT OF PURPOSE/FISCAL NOTE		 H 635