S-1026               _______________________________________________

                                                   SENATE BILL NO. 3822

                        _______________________________________________

State of Washington                              49th Legislature                              1985 Regular Session

By Senator Sellar

Read first time 2/7/85 and referred to Committee on Financial Institutions.

AN ACT Relating to insurance; and amending RCW 48.23.300.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

        Sec. 1.  Section .23.30, chapter 79, Laws of 1947 as amended by section 21, chapter 32, Laws of 1983 1st ex. sess. and RCW 48.23.300 are each amended to read as follows:

          Any life insurer shall have the power to hold under agreement the proceeds of any policy issued by it, upon such terms and restrictions as to revocation by the policyholder and control by beneficiaries, and with such exemptions from the claims of creditors of beneficiaries other than the policyholder as set forth in the policy or as agreed to in writing by the insurer and the policyholder.  Upon maturity of a policy in the event the policyholder has made no such agreement, the insurer shall have the power to hold the proceeds of the policy under an agreement with the beneficiaries.  The insurer shall not be required to segregate funds so held but may hold them as part of its general assets.

          An insurer holding proceeds ((while awaiting determination of the final settlement option shall accrue interest on the proceeds from the date of death or maturity at a rate not less than the lower of the average over a period of thirty-six months and the average over a period of twelve months, ending on June 30 of the calendar year next preceding the year of death or maturity, of Moody's Corporate Bond Yield Average-Monthly Average Corporates, as published by Moody's Investors Service, Inc.  This interest shall become payable as part of the settlement.  If Moody's Corporate Bond Yield Average-Monthly Average Corporates is no longer published by Moody's Investor Service, Inc., or if the National Association of Insurance Commissioners determines that Moody's Corporate Bond Yield Average-Monthly Average Corporates as published by Moody's Investors Service, Inc. is no longer appropriate for the determination of this interest rate, then an alternative interest rate shall be defined by rule adopted by the commissioner)) and failing or refusing to pay the proceeds of, or payments under, any individual policy of life insurance issued by it in this state within thirty days after the proof of death of the insured shall pay interest, at a rate not less than eight percent on any moneys payable and unpaid after the expiration of such thirty-day period.  This section applies only to deaths of insureds that occur on or after three months after the effective date of this act.

Nothing in this section may be construed to allow any insurer admitted to transact life insurance in this state to withhold payment of money payable under a life insurance policy issued in this state to any beneficiary for a period longer than reasonably necessary to transmit such payment.

This section shall not apply to policies issued before the effective date of this act that contain specific provisions to the contrary, nor may the provisions of this section be construed as required provisions under RCW 48.23.020.