Wyoming Life Insurance Claim Law: 45 Days to Decide, 10% on Unreasonable Refusals and a First-Party Bad-Faith Tort

Not legal advice. This page summarizes parts of the Wyoming Statutes as posted by the Wyoming Legislature and one Wyoming Supreme Court decision. It does not cover Department of Insurance rules or most case law.

Four Wyoming features worth knowing

1. A hard 45-day decision window that also caps any settlement period an insurer writes into the policy.
2. Interest from the date of death, with the postmark date counting as the payment date.
3. A court-awarded fee and 10% interest when a refusal to pay is unreasonable or without cause.
4. A recognized bad-faith tort for policyholders, under McCullough.

The 45-day rule: 26-15-124 and 26-16-112

Wyoming does not leave the timing to the policy. W.S. 26-15-124(a) says claims under a life, accident or health policy “shall be rejected or accepted and paid” within forty-five days after receipt of the proofs of loss and supporting evidence. The life policy statute, 26-16-112(a), adds that settlement is due on receipt of proof of death (and, at the insurer’s option, surrender of the policy or proof of the claimant’s interest), and that any settlement period the insurer specifies may not exceed the 45-day requirement.

Because the clock starts with proofs of loss and “supporting evidence,” ask the insurer in writing what, if anything, it still needs, and keep the answer.

Interest from the date of death

Benefits paid within the 45-day window must still include interest accrued from the date of death until the date of payment, at a rate not less than what the insurer pays on death proceeds left on deposit (26-16-112(b)). Two details:

• Postmark counts. The date of payment includes the postmark date on a properly addressed, postage-prepaid envelope containing the payment (26-16-112(c)).
• Variable contracts are carved out. The interest requirement does not apply to variable insurance contracts whose benefits track a separate account (26-16-112(d)), and private placement policies have their own timing rules.

Fees and 10% interest in court: 26-15-124(c)

If a lawsuit on any insurance policy ends in judgment for the claimant, and the court determines the insurer refused to pay the full amount of a covered loss and that the refusal was unreasonable or without cause, the court may award a reasonable attorney’s fee and interest at ten percent per year. The award is discretionary (“may”), and it applies across policy types, not just life.

What application errors matter: 26-15-109

Statements in an application are representations, not warranties. Misrepresentations, omissions, concealment and incorrect statements do not prevent recovery unless one of three things is true:

1. the statement was fraudulent;
2. it was material to acceptance of the risk or to the hazard assumed; or
3. had the insurer known the true facts, it in good faith would not have issued the policy, issued it at the same premium, issued it in as large an amount, or covered the hazard that caused the death.

The third prong is phrased in terms of the insurer’s own underwriting, so an insurer relying on it should be able to show its guidelines.

Contest period and permitted exclusions

• Incontestability. After the policy has been in force during the insured’s lifetime for two years from its date of issue, it is incontestable except for nonpayment; disability and accidental-death provisions are outside the rule (26-16-104).
• Only listed exclusions. A life policy may not exclude or restrict death by a specified cause or while the insured has a specified status, except for war, aviation, a specified hazardous occupation (military service does not qualify), residence outside the continental United States and Canada, and suicide within two years of issue, sane or insane (26-16-119(a)(ii)).
• Reserve floor. A policy using one of those exclusions must still pay at least the policy reserve, adjusted for loans and dividend credits (26-16-119(b)). This section does not apply to group life.
• Suit clauses. A life policy may not limit the time to sue to less than three years after the cause of action accrues (26-16-119(a)(i)).
• Grace. Thirty days (or one month of at least 30 days), with any overdue premium and up to 6% interest deductible from proceeds if death occurs during grace (26-16-103).

Unfair claims settlement practices: 26-13-124

Wyoming lists seventeen practices that are unfair when committed with a frequency that indicates a general business practice. Those most relevant to death claims include:

• refusing to pay without a reasonable investigation based on all available information (iv);
• not affirming or denying coverage within a reasonable time after proof of loss statements are complete (v);
• not trying in good faith to settle once liability is reasonably clear (vi);
• forcing litigation by offering substantially less than is later recovered (vii);
• paying a beneficiary without a statement of the coverage the payment is made under (x); and
• not promptly explaining, with reference to the policy and the facts or law, why a claim was denied (xiv).

The pattern requirement means one bad claim alone may not violate this section, though the same conduct can still matter under 26-15-124(c) or in a bad-faith case.

McCullough v. Golden Rule (1990)

The Tenth Circuit asked the Wyoming Supreme Court two certified questions in a health insurance dispute where surgical bills were denied as preexisting. In McCullough v. Golden Rule Insurance Co., 789 P.2d 855 (Wyo. 1990), the court:

• held that an insurer’s duty of good faith not to unreasonably deny a policy claim supports an independent tort action, adopting the approach of Gruenberg (Cal. 1973);
• rejected the argument that the unfair-practices statutes preempt the tort;
• adopted an objective “fairly debatable” test: would a reasonable insurer, under the circumstances, have denied or delayed payment; and
• limited punitive damages to cases showing wanton or willful misconduct, not every bad-faith verdict.

McCullough involved policyholders suing their own health insurer. Whether a life-policy beneficiary can bring the same tort is a question for a Wyoming lawyer.

Group life

Group life policies delivered in Wyoming must include conversion rights:

• Leaving the group. If coverage ends with employment or eligibility, the person can get an individual policy without evidence of insurability by applying and paying the first premium within 31 days; the group policy may exclude term (26-17-118). Surviving dependents have the same right when coverage ends at the employee’s death.
• Plan ends. People insured at least three years before the group policy terminates or drops their class may convert, in an amount equal to the lost coverage minus new group coverage obtained within 31 days (26-17-119).
• Death during the window. The amount that could have been converted is payable as a group claim, whether or not anyone applied (26-17-120).
• No notice. If the person is not told of the right at least 15 days before it expires, the window extends to 15 days after notice, but never past 60 days after the original period ends (26-17-122).

For employer plans under federal law, see employer group life.

Time to sue

W.S. 1-3-105(a)(i) allows ten years for an action on a contract or promise in writing. Policy suit clauses can be shorter but not under three years after accrual (26-16-119(a)(i)).

Slayer rule: 2-14-101

A person who feloniously takes, or causes or procures another to take, the life of another may not take life insurance proceeds as beneficiary, and the benefits pass as though the killer had died first. The statute’s text, as reviewed, does not condition this on a criminal conviction.

The insurer, however, is discharged if it pays the named beneficiary according to the policy unless, before payment, it receives written notice from a claimant that heirs will claim the proceeds under this section (2-14-101(c)). A similar rule protects insurers that pay the designated person before receiving written notice at the home office of a competing claim (26-15-123). Families with concerns about a beneficiary should put the insurer on written notice immediately.

Divorce or annulment: 2-6-125

Wyoming’s divorce rule is Wyo. Stat. 2-6-125. On divorce or annulment, the statute immediately revokes gifts to the ex, or to the ex’s relatives, in a pre-divorce instrument that the insured had the power to revoke or amend. That gives way if the instrument expressly provides for the former spouse after a divorce, or if governing law, a court order or a property-division contract says otherwise. The ex is treated as having disclaimed, and a remarriage revives the provision unless a prenuptial or other written agreement signed by both prohibits it.

An insurer is not liable for paying in good-faith reliance on the instrument unless it received reasonable written notice of the divorce, annulment or remarriage, and it has no duty to ask whether the couple were still married. The rightful taker can still recover from the person wrongly paid. ERISA may override the rule for employer plans (Egelhoff).

Example

A Casper widow sends the death certificate and claim form on June 1, and the insurer confirms June 3 that the file is complete. A rejection or payment is due by mid-July. If the insurer pays on July 10, the check should include interest from the date of death; if it instead denies without a reasonable basis and loses in court, the judge may add fees and 10% interest.

Complaints

The Wyoming Department of Insurance’s Consumer Affairs section handles consumer complaints: Contact Consumer Affairs (Wyoming Department of Insurance). Contacting the department does not pause the time to sue.

Sources

• Wyoming Statutes, Wyoming Legislature (Titles 1, 2 and 26, PDF): wyoleg.gov.
• Wyoming Department of Insurance: doi.wyo.gov.
• McCullough v. Golden Rule Insurance Co., 789 P.2d 855 (Wyo. 1990) (full opinion, CourtListener): courtlistener.com. Read November 3, 2026.
• Wyoming Statutes 2-6-125 (official PDF, Wyoming Legislature): wyoleg.gov.

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.