State RegulationsCO specificDifficulty 2/5
Under C.R.S. § 10-7-112, once the initial period after death has run, what rate applies to an unsettled Colorado life death benefit until settlement is made?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under C.R.S. § 10-7-112, interest on a death benefit runs at the proceeds-left-on-deposit rate through 30 days after the insurer receives the complete proof of death; from that point until settlement, the rate becomes the federal discount rate plus 2 percentage points. The escalating rate discourages insurers from holding validated death claims indefinitely. A steeper margin — 4 percentage points — applies only where the claim was denied and a judgment is rendered for the beneficiary.
Why the other options are wrong
- A) The statute fixes the rate by reference to the federal discount rate, not the insurer's portfolio earnings.
- B) A margin is added to the federal discount rate; the settlement-period margin is 2 percentage points.
- C) The Commissioner does not set this rate annually; it is fixed by the terms of C.R.S. § 10-7-112.
Memory hook
After the proof window, add two to the discount rate — four only after a judgment.