(A) On and after January 1, 2003, any insurance company authorized to do business in this state shall pay interest, in accordance with division (B) of this section and subject to division (C) of this section, on any proceeds that become due pursuant to the terms of a policy of sickness and accident insurance due to the death of the insured by sickness or accident.
(B) The interest payable pursuant to division (A) of this section shall be computed from the date of the death of the insured to the date of the payment of the proceeds and shall be at whichever of the following rates is greater:
(1) The annual short-term applicable federal rate for purposes of section 1274(d) of the Internal Revenue Code, as defined in section 5747.01 of the Revised Code, in effect for the month in which the insured died;
(2) The current rate of interest on proceeds left on deposit with the company under an interest settlement option contained in the policy of sickness and accident insurance.
(C) Division (A) or (B) of this section does not require the payment of interest unless the insured was a resident of this state on the date of the insured's death and unless the beneficiary under the policy of sickness and accident insurance elects in writing to receive, or a written election has been made for the beneficiary to receive, the proceeds of the policy by means of a lump sum payment.
Effective Date: 07-26-2002 .