Connecticut Life Insurance Claim Laws: Interest, Bad Faith

Not legal advice. This page summarizes sections of the Connecticut General Statutes as posted by the Connecticut General Assembly and one Connecticut Supreme Court opinion. Insurance Department regulations and most later case law are not covered.

What sets Connecticut apart

Interest keyed to the insurer’s own rate, the rate it pays on proceeds left under its interest settlement option, beginning no later than ten days after death (38a-452).
A forfeiture for withholding the application. Ignore a demand for a copy for 30 days and the insurer loses misrepresentation defenses based on it (38a-437).
Employer exposure on group life. No timely notice of cancellation means the employer answers for the benefit (38a-456).
A detailed slayer statute that reaches certain larceny and abuse convictions as well as homicide, and lets a court decide by a preponderance when the beneficiary has died (45a-447).

Interest on the death benefit: 38a-452

The statute has two tracks.

No lawsuit. Interest is computed daily at the rate the insurer currently pays on proceeds left under its interest settlement option. It starts no later than ten days after the date of death and runs to the date of payment, and it is added to the total paid (38a-452(b)).
Lawsuit ending in a judgment against the insurer. Interest runs from the date of death to the date of the verdict, report or decision, computed under the same subsection (b) method (38a-452(a)).

The section does not apply to policies issued before October 1, 1976 that contain specific contrary provisions (38a-452(c)). The rate is whatever the company’s settlement option pays, so ask the insurer to state that rate in writing when it sends the check.

Contest and suicide periods

Chapter 700b as posted does not contain a statutory incontestability clause or suicide-exclusion limit of the kind many states write into their codes. Those terms come from the policy form, which must be filed with and approved by the Insurance Commissioner before use; the commissioner must disapprove forms with unfair or deceptive provisions (38a-430(a)). Department regulations on standard provisions are outside this page, so read the contest and suicide clauses in the policy itself.

Two statutory limits worth knowing:

Military service. A life policy issued to a person known to be an active member of the armed forces or National Guard may not exclude deaths related to war or military service, except for accidental-death coverage such as double indemnity (38a-430(b)).
Free look. Individual policies must carry notice that the applicant may return the policy within ten days of receipt and have it treated as void from the start (38a-436).

The application-copy rule: 38a-437

A policyholder, or the person whose life is insured, can demand a copy of the application on which the policy was issued. If the company fails for thirty days to furnish it, the company is “forever barred” from setting up any error, incorrectness, fraud or misrepresentation in that application as a defense to a suit on the policy, and the application is taken as true and correct for purposes of the claim.

The statute gives the demand right to the policyholder and the insured, not expressly to a beneficiary. Where the beneficiary is also the owner, or the estate stands in the owner’s shoes, a written demand may be worth sending early. Whether a post-death demand by someone else triggers the bar is a question for a Connecticut lawyer.

Unfair claim settlement practices: CUIPA

The Connecticut Unfair Insurance Practices Act prohibits unfair practices (38a-815). Section 38a-816(6) lists claim practices that violate the act when committed with such frequency as to indicate a general business practice, including:

misrepresenting pertinent facts or policy provisions (A);
refusing to pay without a reasonable investigation based on all available information (D);
failing to affirm or deny coverage within a reasonable time after proof of loss statements are completed (E);
not attempting in good faith to settle promptly when liability is reasonably clear (F);
making payments to beneficiaries without a statement of the coverage under which they are paid (J); and
failing to promptly give a reasonable explanation of a denial or compromise offer (N).

Because of the general-business-practice requirement, a single mishandled claim usually supports a complaint to the department more readily than a CUIPA theory in court. How CUIPA interacts with the Connecticut Unfair Trade Practices Act is a body of case law this page does not cover.

The case: Buckman v. People Express (1987)

In Buckman v. People Express, Inc., 205 Conn. 166, 530 A.2d 596 (1987), a fired employee asked his self-insured former employer for a health-coverage conversion form and did not get the statutory notice he needed to continue coverage. The employer argued that the statute’s own remedy was exclusive. The Connecticut Supreme Court disagreed: it “recognizes an independent cause of action in tort arising from an insurer’s common law duty of good faith,” separate from statutory claims. A statutory remedy does not displace the common-law duty unless the statute fairly says so. The court let the jury verdict stand, including damages for emotional distress.

The trial court’s instruction, which the court upheld, described bad faith as more than bad judgment or negligence: it implies “the conscious doing of a wrong because of dishonest purpose or moral obliquity.”

Buckman involved health coverage and an employer acting as its own insurer. How the duty applies to a life insurance beneficiary is a question for a Connecticut lawyer.

Group coverage and employer notice

Under 38a-456, an employer providing group life coverage must mail or deliver notice to each insured employee at least fifteen days before the coverage is cancelled or discontinued. The Labor Commissioner may fine a non-complying employer up to $2,000 per violation, and the employer is liable for benefits to the same extent as the insurer would have been had coverage continued. That makes the employer a potential defendant when an employee dies after a lapse nobody told the family about.

Most employer plans are also governed by federal law, which can change the analysis; see employer group life.

Time limits

Conn. Gen. Stat. 52-576(a) allows six years from accrual for actions on written contracts, with three years after the disability ends for a person legally incapable of suing when the claim accrued (52-576(b)). Read the policy for any shorter suit clause.

Slayer statute: 45a-447

Subsection (c) governs life insurance. A named beneficiary who intentionally causes the death of the insured, or who is finally adjudged guilty under sections 53a-122, 53a-123 or 53a-321, takes nothing, and the policy is paid as though the beneficiary had predeceased the insured.

A conviction, or a finding of not guilty by reason of mental disease or defect, under the listed sections is conclusive (45a-447(c)(2)(A)).
If the beneficiary has died, an interested person may ask the Superior Court to decide by a preponderance of the evidence that the beneficiary would have been found guilty (45a-447(c)(2)(B)).
With no conviction, finding or determination, the court may decide entitlement under common law and equity (45a-447(c)(2)(C)), and the burden is on the person challenging the beneficiary (45a-447(c)(2)(D)).
An insurer that pays under the policy terms owes nothing more unless it received written notice of a claim at its home office or principal address before paying (45a-447(c)(3)).

For defendants convicted under 53a-122, 53a-123 or 53a-321, subsection (d) lets a court in equity override the bar if that would carry out the victim’s intent or the bar would be grossly inequitable.

Example

An employee in Hartford is told nothing when her employer drops its group life plan on March 1, and she dies in April. Under 38a-456 her employer, having given no fifteen-day notice, is liable for the benefit as the insurer would have been. On her separate individual policy, the insurer pays in July; interest at its settlement-option rate runs from no later than ten days after her death.

Complaints

The Connecticut Insurance Department takes consumer complaints online: File a Complaint (Connecticut Insurance Department). Filing does not pause the time to sue.

Sources

Read November 3, 2026:

Buckman v. People Express, Inc., 205 Conn. 166 (1987) (CourtListener)

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.