                                 CODE OF VIRGINIA

INTEREST ON ACCIDENT AND SICKNESS CLAIM PROCEEDS (§ 38.2-3407.1)

A. If an action to recover the claim proceeds due under an individual or group
accident and sickness policy results in a judgment against an insurer, interest
on the judgment at the legal rate of interest shall be paid from the date of
presentation to the insurer of proof of loss to the date judgment is entered.

B. If no action is brought, interest upon the claim proceeds paid to the
policyholder, insured, claimant, or assignee entitled thereto shall be computed
daily at the legal rate of interest from the date of fifteen working days from
the insurer&#8217;s receipt of proof of loss to the date of claim payment.

C. This section shall not apply to individual policies issued prior to July 1,
1990, but shall apply to any renewals or reissues of group accident and sickness
policies occurring after that date.

D. This section shall not apply to claims for which payment has been or will be
made directly to health care providers pursuant to a negotiated reimbursement
arrangement requiring uniform or periodic interim payments to be applied against
the insurer&#8217;s obligation on such claims.

E. For purposes of this section, &#8220;proof of loss&#8221; means all necessary
documentation reasonably required by the insurer to make a determination of
benefit coverage.

F. This section shall not apply to claims proceeds payable to an out-of-state
provider of pharmacy services for pharmacy services rendered outside of the
Commonwealth. Notwithstanding the foregoing sentence, this section shall apply
to claims proceeds payable to such an out-of-state provider if the state where
such services are rendered fails to provide for the payment of interest on the
claims proceeds. If this section is applicable to claims proceeds payable to
such an out-of-state provider as a result of the failure of such other state to
provide for the payment of interest on the claims proceeds, then,
notwithstanding the provisions of subsection B, interest upon the claim proceeds
paid to the policyholder, insured, claimant, or assignee entitled thereto shall
be computed daily at the legal rate of interest from the thirtieth day following
the insurer&#8217;s receipt of proof of loss to the date of claim payment.

HISTORY: 1990, c. 531; 1992, c. 23; 1996, c. 75; 2009, c. 226.