S-2307               _______________________________________________

                                         SUBSTITUTE SENATE BILL NO. 3822

                        _______________________________________________

State of Washington                              49th Legislature                              1985 Regular Session

By Senate Committee on Financial Institutions (originally sponsored by Senator Sellar)

Read first time 3/6/85.

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)) death benefits under a life insurance policy that fails to pay such benefits to a beneficiary who is a resident of this state, or to any beneficiary of an insured who was a resident of this state at time of death, within thirty days after receipt of proof of death, shall pay interest for the succeeding sixty days at a rate not less than that currently being offered to its life insurance beneficiaries who are considering leaving policy proceeds on deposit with the insurer.  Commencing on the ninety-first day from the receipt of proof of death and thereafter, unpaid death benefits that have not been tendered to the beneficiary shall accrue interest at the aforementioned rate plus three percent.  This section applies to deaths of insureds that occur on or after September 1, 1985.