State RegulationsMI specificDifficulty 2/5
A Michigan insurer fails to pay an accident and health claim within 60 days after satisfactory proof of loss is filed. What interest applies to the unpaid benefits?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
M.C.L. 500.2006 requires benefits not paid within 60 days after satisfactory proof of loss to accrue interest at 12% per annum on the unpaid amount. The 45-day figure governs the separate deadline for paying clean claims, and the interest obligation begins by operation of law — the insured need not sue to collect it.
Why the other options are wrong
- A) The statute imposes 12% annual interest automatically once the 60-day window passes.
- B) 45 days is the clean-claim payment deadline under M.C.L. 500.2006, not the interest trigger.
- D) Interest accrues by operation of law without a lawsuit under M.C.L. 500.2006.
Memory hook
60 days late? Add 12% a year, automatically.