Background
Olga Hall owned a $22,222 policy on her husband’s life. He died ten months after it was bought, and the insurer refused to pay. She sued for the proceeds and for bad faith, and a jury awarded the policy proceeds plus $3,000 for the bad-faith denial. Judgment came three years after his death. The trial court then awarded prejudgment interest at 3%, the rate it found under the general late-payment statute. The Court of Civil Appeals affirmed.
What the court held
The Supreme Court took the case to decide, for the first time, which statute applies. Section 4030.1 required payment within 30 days after proof of death and interest from the date of death if payment was late, at a rate tied to what the insurer paid on proceeds left on deposit. Section 3629(B) applied when a claim was litigated and the insured prevailed. It added interest of 15% a year from the date the loss was payable under the contract to the date of the verdict. Applying the rule that a specific statute governs over a general one, the court held that section 3629(B) controlled litigated claims. It vacated the Court of Civil Appeals opinion, reversed the trial court, overruled a conflicting intermediate appellate decision, and remanded with directions to award 15%.
Why it matters
Many states require interest on life insurance proceeds that are paid late, and some have separate rules for claims that end up in court. Hall shows that the choice of statute can make a large difference in the recovery. Statutes and rates change, so check the current text of your state’s law, not a 1999 decision, before relying on any rate. See our guide to delayed life insurance claims.
Read the opinion
Hall v. Globe Life & Accident Ins. Co., 1999 OK 89, 998 P.2d 603 (OSCN, Oklahoma’s official court records site).
Not legal advice. This page summarizes general rules and the specific statutes cited. Your policy's wording, the state whose law applies, and whether the coverage came through an employer can all change the result. See the disclaimer and editorial policy.