Freiberg and Peck - Freiberg and Peck, Interest upon proceeds of life insurance policies and annuity

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Freiberg and Peck, Interest upon proceeds of life insurance policies and annuity

Posted at 1:57 AM on 3/19/2008

Freiberg and Peck, Interest upon proceeds of life insurance policies and annuity

contracts. (a) If an action to recover the proceeds due under a policy

of life insurance or contract of annuity delivered or issued for

delivery in this state results in a judgment against the insurer,

interest thereon shall be paid from the date of the death of the insured

or annuitant in connection with a death claim on a policy of life

insurance or contract of annuity and from the date of maturity of an

endowment contract to the date the verdict is rendered or the report or

decision is made, computed pursuant to the provisions of subsection (c)

hereof, and thereafter in accord with the provisions of sections five

thousand two and five thousand three of the civil practice law and

rules.

(b) If an action to recover is commenced and a settlement is reached

before the verdict is rendered or the report or decision is made,

interest on the settlement shall be paid from the date of the death of

the insured or annuitant in connection with a death claim on such a

policy of life insurance or contract of annuity and from the date of

maturity of an endowment contract to the date of payment computed under

the provisions of subsection (c) hereof.

(c) If no action has been commenced, interest upon the principal sum

paid to the beneficiary or policyholder shall be computed daily at the

rate of interest currently paid by the insurer on proceeds left under

the interest settlement option, from the date of the death of an insured

or annuitant in connection with a death claim on such a policy of life

insurance or contract of annuity and from the date of maturity of an

endowment contract to the date of payment and shall be added to and be a

part of the total sum paid.

(d) This section shall not require the payment of interest for any

period during which an insurer is required to pay interest under any

state or federal law pertaining to interpleader.

(e) This section shall not apply to policies or contracts issued prior

to September first, nineteen hundred seventy-five, which contain

specific provisions to the contrary.