Sec. 8. (a) An insurer that pays a policy death benefit in any manner other than a lump sum payment of the full amount of the policy proceeds shall provide, in written or electronic form, a disclosure containing a complete list and clear explanation of all payment options available to the beneficiary.

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Terms Used In Indiana Code 27-2-22-8

  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • insured: means the individual whose life is the subject of insurance under a policy. See Indiana Code 27-2-22-3
  • insurer: means an insurance company that issues a policy. See Indiana Code 27-2-22-4
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • policy: means a policy or certificate that provides the kind of insurance described in Class 1 of IC 27-1-5-1. See Indiana Code 27-2-22-5
  • retained asset account: means a mechanism through which the settlement of proceeds payable under a policy occurs by the insurer's deposit of the proceeds into a checking or draft account:

    Indiana Code 27-2-22-6

     (b) An insurer described in subsection (a) shall not use a retained asset account as the default manner of payment of the policy death benefit unless the insurer conspicuously discloses to the beneficiary that, in the event that the beneficiary does not choose another payment option, a retained asset account will be used as the default manner of payment.

     (c) The disclosure required by section 7 of this chapter must include the following information:

(1) A recommendation for the beneficiary to consult a tax, investment, or other financial adviser regarding tax liability and investment options.

(2) The:

(A) method by which interest rates are determined;

(B) timing and method of interest rate changes; and

(C) dividends or other gains that may be paid to the beneficiary;

applicable to the funds in the retained asset account.

(3) The identity of the custodian of the funds in the retained asset account.

(4) Whether the retained asset account is insured by the Federal Deposit Insurance Corporation and, if so, the amount of the coverage.

(5) Any limitations on the number and amount of withdrawals of funds from the retained asset account, including minimum or maximum benefit payment amounts.

(6) Services related to the retained asset account that are provided for a fee, including a list of the fees or method of calculation of the fees.

(7) The nature and frequency of statements of account for the retained asset account.

(8) That the payment of some or all of the proceeds may be by the delivery of checks, drafts, or other instruments to access the available funds.

(9) That the entire proceeds are available to the beneficiary by the use of one (1) check, draft, or other instrument.

(10) That the insurer or a related party may derive income, in addition to fees charged on the retained asset account, from the total gains received on the investment of the balance of funds in the retained asset account.

(11) The telephone number, address, and other contact information, including Internet web site address, from which the beneficiary may obtain additional information regarding the retained asset account.

(12) The following statement:

“FOR FURTHER INFORMATION, PLEASE CONTACT YOUR STATE DEPARTMENT OF INSURANCE.”.

     (d) The disclosures described in this section must be written in:

(1) layman’s terms; and

(2) bold or at least 12 point type.

As added by P.L.67-2011, SEC.1. Amended by P.L.6-2012, SEC.187.

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