State RegulationsCO specificDifficulty 2/5
An insurer in Denver received a complete payout request with due proof of death more than 30 days ago, and settlement has not yet occurred. Under C.R.S. § 10-7-112, at what rate does interest continue to accrue until settlement?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
C.R.S. § 10-7-112 provides that after the first interest period — from the date of death through 30 days after receipt of a complete payout request with due proof of death, at the proceeds-left-on-deposit rate — interest continues until settlement at the federal discount rate plus 2 percentage points.
Why the other options are wrong
- A) The federal discount rate plus 4 percentage points applies only when the claim is denied and judgment is rendered, measured from the filing of the action.
- C) The 10% annual interest figure belongs to the prompt-pay law for health claims (C.R.S. § 10-16-106.5), not to life proceeds under § 10-7-112.
- D) The proceeds-left-on-deposit rate applies only through the first 30-day window after receipt of the complete payout request.
Memory hook
Death to day 30: deposit rate. Then discount rate plus 2 until settlement.