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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Regular Session, 2012
SENATE BILL NO. 742
BY SENATOR BROWN
LIFE INSURANCE. Provides relative to payment of life insurance proceeds. (8/1/12)
AN ACT1
To amend and reenact R.S. 22:1811 and to enact R.S. 22:1812, relative to payment of death2
benefits; to provide with respect to investigations of preexisting conditions; to3
provide for payment of certain benefits pending an investigation; to provide for4
prescription of an insurer's right to contest payment due to a preexisting condition;5
and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 22:1811 is hereby amended and reenacted and R.S. 22:1812 is hereby8
enacted to read as follows:9
§1811. Payment of claims; life policies; penalty 10
All death claims arising under policies of insurance issued or delivered11
within this state shall be settled by the insurer within sixty days after the date of12
receipt of due proof of death, and if the insurer fails to do so without just cause, the13
amount due shall bear interest at the rate of eight percent per annum from date of14
receipt of due proof of death by the insurer until paid, except as provided in R.S.15
22:1812.16
§1812. Payment of death benefits pending determination of preexisting17 SB NO. 742
SLS 12RS-1573 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
condition1
A. Any death claim arising under a policy of insurance issued or2
delivered within this state in which the insurer has reason to believe that the3
death was caused by a preexisting condition that was not disclosed by the4
insured at the time of issuance of the policy shall be subject to the provisions of5
this Section.6
B.(1) If the insurer contests the payment of death benefits due to the7
possibility of a preexisting condition, the insurer shall conduct an investigation8
to determine whether or not the preexisting condition caused the death of the9
decedent. This investigation shall be completed within a reasonable time after10
the insurer receives a valid certificate of death of the insured but in no case shall11
the investigation extend more than one year from the insurer's receipt of this12
certificate.13
(2) The right of the insurer to contest payment of death claim benefits14
based upon a preexisting condition of the decedent, absent a finding of fraud,15
shall prescribe one year from the date of receipt of the certificate of death of the16
insured.17
C. Within ten days after receipt of a valid death certificate and pending18
the outcome of an investigation conducted pursuant to this Section, the insurer19
shall pay to the beneficiary or beneficiaries under the insurance policy, an20
amount equal to the policy premiums paid under the policy from its issuance21
until the decedent's death plus interest at the rate provided by law. If the22
insurer fails to pay the amounts due under this Subsection within six months23
after receipt of the death certificate, then interest on the amounts due after this24
six month period shall be computed at an annual rate of twenty-five percent25
until the total amount due is paid.26
D. If the insurer determines that a preexisting condition caused the death27
of the decedent, which preexisting condition was not disclosed at the time of28
issuance of the insurance policy, and the insurer denies payment of the death29 SB NO. 742
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
benefits, then within thirty days after completion of the investigation, the1
insurer shall provide the named beneficiary or beneficiaries with a clear and2
concise statement of its findings with all evidence supporting its findings and the3
reasons for denying payment of death benefits under the terms of the insurance4
policy.5
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Laura Gail Sullivan.
DIGEST
Present law requires insurers to settle payment of death claims within 60 days after the date
of receipt of due proof of death. Requires the insurer who fails to make payment without just
cause to also pay interest at 8% per year from date of receipt of proof of death until paid.
Proposed law retains these provisions but provides for payment of certain benefits pending
a determination of whether an undisclosed preexisting condition caused the decedent's death.
Proposed law authorizes an insurer to contest payment of death benefits due to the possibility
of a preexisting condition. Requires that the investigation be completed within a reasonable
time after receipt of a valid certificate of death but in no case more than one year from the
insurer's receipt of a valid death certificate. Requires that the right of an insurer to payment
of death benefits based upon a preexisting condition, absent a finding of fraud, prescribes
one year from the date of receipt of the certificate of death of the insured.
Proposed law further requires that within ten days after receipt of the valid certificate and
pending the outcome of an preexisting condition investigation, the insurer to pay to the
beneficiary or beneficiaries an amount equal to the policy premiums paid from issuance of
the policy until the decedent's death plus interest at the rate provided by law. Provides that
if the insurer fails to pay these amounts due within six months after receipt of the death
certificate, then interest on the amounts due after this six month period is to be computed at
an annual rate of 25% until the total amount due is paid.
Proposed law provides that if the insurer determines that a preexisting condition caused the
decedent's death and the condition was not disclosed at the time of issuance of the policy,
and the insurer denies payment of the death benefits, then within 30 days after completion
of the investigation, the insurer is to provide the named beneficiary or beneficiaries with a
clear and concise statement of its findings with all evidence supporting its findings and the
reasons for denying payment of death benefits under the terms of the insurance policy.
Effective August 1, 2012.
(Amends R.S. 22:1811; adds R.S. 22:1812)