HB401 Alabama 2015 Session

Updated Feb 26, 2026

Notable

Summary

Primary Sponsor: Mike Hill
Republican
Session: Regular Session 2015
Title: Life insurance, insurer required to pay interest on money due on contract under certain conditions, applicable only to future policies, Sec. 27-15-13 am'd.
Summary: HB401 requires life insurance companies to pay interest on delayed death-benefit proceeds for new policies, if payment is not made within 30 days after receipt of proof of death.
What This Bill Does
It amends the life insurance payment rules to add a 30-day deadline; if the insurer does not pay within 30 days after receiving satisfactory proof of death and the claimant's interest, and the beneficiary chooses a lump-sum payment (including via a retained asset account), the insurer must pay interest on the overdue amount. Interest is calculated from the date the death proof is received until the date of payment, at the insurer's current rate of interest on death proceeds left on deposit. The provision applies only to life insurance contracts entered into on or after October 1 following the act’s effective date, and it does not apply to annuity contracts.

Who It Affects
Policyholders or beneficiaries of new life insurance contracts who may receive delayed death-benefit payments and thus could earn interest on overdue proceeds.
Life insurance companies/insurers who must pay the additional interest if they delay payment beyond 30 days.

Key Provisions
Amends Section 27-15-13 to require interest on overdue death-benefit proceeds if payment is not made within 30 days after satisfactory proof of death and claimant’s interest.
Interest accrues from the date of receipt of death proof to the payment date; rate is the current rate of interest on death proceeds left on deposit with the insurer.
Applies only to life insurance contracts entered into on or after October 1 following the act’s effective date.
Excludes annuity contracts from the provisions.
Beneficiaries may elect lump-sum payments (including via a retained asset account) and still receive interest on overdue amounts after the 30-day period.
Effective date: first day of the third month after the act is passed and approved.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Insurance